Bitcoin bulls are facing increasing pressure as the cryptocurrency’s price dipped to $55,282 during the Asia session on Bitstamp. With the United States unemployment data release looming, Bitcoin’s recent price action has left traders concerned as the asset teeters near six-month lows from early August.
Data from Cointelegraph Markets Pro and TradingView reveals that Bitcoin’s recent slide comes amid a broader downtrend, prompting warnings from prominent analysts. Caleb Franzen, a well-known market observer, highlighted Bitcoin’s vulnerability, drawing attention to its key technical indicators: the 200-day simple moving average (SMA) and the 200-day exponential moving average (EMA). These averages, standing at $63,840 and $59,462, respectively, have formed a “cloud” that signals potential trouble for Bitcoin’s future price movement.
Bitcoin At Risk Of Deeper Declines
Franzen’s analysis, posted on X (formerly Twitter), suggests that Bitcoin could enter a more significant downtrend if the price closes below $54,000—marking a crucial support level from August 5. He warned that this would signal a rejection of the moving average cloud, potentially paving the way for lower prices.
“If Bitcoin loses this green range and has a daily close below $54k (the low daily close on Aug. 5), I’ll concede that this is a formal rejection & new low on the 200-day MA cloud,” Franzen commented. However, in a later post on September 5, he highlighted a bullish divergence on Bitcoin’s Relative Strength Index (RSI), offering a glimmer of hope for traders as the RSI showed upward momentum despite the price declines.
Bears in Control – Traders Brace for Sub-$50,000 Bitcoin
Bitcoin’s uncertain price action has raised concerns among other well-known traders. Former BitMEX CEO Arthur Hayes recently announced a short position, predicting that Bitcoin could fall below $50,000. Hayes’ bearish sentiment underscores the growing unease in the market, as sellers appear to dominate Bitcoin’s price action.
Popular trader Peter Brandt also weighed in, identifying a megaphone pattern on Bitcoin’s weekly chart, which he said could indicate increased volatility. Brandt’s analysis suggests that Bitcoin could experience a “massive thrust” into price discovery, but only after testing lower levels near $46,000.
Also Read: Ethereum Underperforms Bitcoin By 44% Since PoS Switch – CryptoQuant Data Reveals Decline
What’s Next for Bitcoin?
As Bitcoin’s price hovers near crucial support levels, traders are bracing for potential volatility in the coming days. The 200-day moving average cloud looms large over the market, with analysts keeping a close eye on whether Bitcoin can maintain its position above key thresholds or whether a deeper downtrend will take hold.
For now, Bitcoin remains in a precarious position, with both bulls and bears waiting to see how the market reacts to upcoming economic data. Should Bitcoin close below $54,000, it may confirm Franzen’s fears of a deeper correction, pushing Bitcoin into new lows and testing the resolve of bullish investors.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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