Bitcoin (BTC) experienced a significant decline, dropping below $28,700, following the opening of the Wall Street market on August 7. The downward movement was attributed to “endless spot selling,” which put pressure on BTC price action. Data from Cointelegraph Markets Pro and TradingView indicated that BTC/USD was approaching its August lows after a tumultuous weekly close.
The lack of relief for bulls was evident as the United States trading session began after a weekend of sideways movement. Traders and analysts were already anticipating a downward outcome once the impasse was broken. Notably, the premium of derivatives trading over spot trading was seen as a disadvantageous position for bulls. Popular trader Daan Crypto Trades warned his followers on Twitter about the negative signs accompanying the perpetual pair premium versus spot, combined with the continuous spot selling and choppy price action.
DecenTrader, a trading suite, issued a warning that one of its proprietary trading tools had turned bearish across most timeframes. The weakening of support at $29,000 was also highlighted by well-known trader Crypto Tony, who emphasized the ongoing weakness in the market. Trading team IncomeSharks added that losing the $29,000 support level was contributing to the slow bleed and urged caution.
Bets on a drop in BTC price coinciding with the U.S. Consumer Price Index (CPI) print on August 10 were already being placed. This scenario would align with the classic BTC price action. CoinGlass, a monitoring resource, reported that total BTC long liquidations amounted to over $10.5 million on the day, with cross-crypto long liquidations standing at $60 million.
Zooming out to weekly timeframes, trader and analyst Rekt Capital highlighted an interesting development for BTC/USD. He noted that weekly candles were on the verge of completing a double top formation, with confirmation expected within the next month. However, for the classic M-shaped pattern to be printed, Bitcoin would need to revisit the $26,000 region, requiring a violation of multiple key moving averages.
These key moving averages included the 200-week simple moving average (SMA), as well as the 21-week and 50-week exponential moving averages (EMAs). Rekt Capital stated that the support cluster around $26,000 could prevent the double top formation and allow Bitcoin to establish a weekly higher low, potentially continuing its upward trajectory.
It is important to note that this article does not provide investment advice or recommendations. It is crucial for readers to conduct their own research and analysis before making any investment or trading decisions.
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