Bitcoin (BTC) saw a steady decline towards $27,000 following the opening of Wall Street on August 30. This decline occurred after digital asset manager Grayscale won a legal victory against the United States regulators.
The price volatility of BTC cooled down after the positive verdict for Grayscale’s legal case. This verdict sparked a 7.5% increase in BTC’s price, pushing it up to $28,143 on Bitstamp, its highest level in almost two weeks. However, the price quickly consolidated lower after reaching this peak.
Despite closing the daily candle above two important moving averages, these averages had not yet become definitive intraday support. Analysts remained cautious due to the absence of genuine buyer interest on spot markets. The increase in BTC’s price seemed to have originated on derivatives exchanges rather than spot markets.
Data from CryptoQuant showed that the trading volume ratio between spot and derivative exchanges had decreased during the price increase. Trading volumes were also lower than those seen during previous upticks in 2023. These factors indicated a lack of strong buyer interest in the market.
The caution extended to the long-term outlook as well. Trader and analyst Rekt Capital suggested that BTC’s price movement resembled a copycat move similar to the one seen in 2021 when BTC reached its all-time high. While a new price peak was not expected, the recent tops around $31,000 on the weekly chart and subsequent breakdown resembled Bitcoin’s performance prior to the 2022 bear market. If this similarity continues, $26,000 could become a resistance level, leading to further downside.
Rekt Capital also mentioned that $23,000 has become an important level to watch for a potential price bottom. This level was significant during the 2022 bear market, forming an inverse head and shoulders pattern. Rebound potential could be seen at this level.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making any investment decisions.
In conclusion, the price of Bitcoin declined towards $27,000 after Grayscale’s legal victory. The absence of genuine buyer interest on spot markets and similarities to previous price patterns raised caution among analysts. $26,000 and $23,000 were identified as potential support and resistance levels to watch in the coming days. Investors are advised to conduct thorough research before making any investment decisions.