Bitcoin is currently facing the threat of a bearish breakdown, with the possibility of its support level at $25,000 being breached. On September 11th, Bitcoin experienced a significant drop from its previous range of $25,500 to $26,500, reaching a low of $24,950. If the daily closing price falls below $24,750, there is a chance that Bitcoin could drop below the $20,000 range. However, there is a slight chance that the momentum could shift in favor of bulls.
A well-known trader, who goes by the name of Horse, believes that the $25,000 level presents a good buying opportunity. According to Horse, this level is the best area to trap sellers and offers a favorable risk-to-reward ratio for long positions. Horse further expressed confidence in this level by stating that the chances of the market breaking below it are slim.
There are several indicators in global markets that provide hope for buyers. Bitcoin has historically shown a negative correlation with the U.S. dollar and a positive correlation with stocks. On September 11th, when the S&P 500 and Nasdaq were trading higher, the U.S. Dollar Index (DXY) was falling. The DXY is currently approaching its long-term range high levels, which could indicate a potential negative price reversal. If the dollar weakens, it could provide additional support for Bitcoin’s price.
Market participants are also closely watching the Consumer Price Index (CPI) print in the United States, which is set to be released on September 13th. This data is expected to provide a decisive direction for global markets, including Bitcoin.
On-chain analytics outlet Glassnode recently released a report highlighting the current market conditions. The report indicates that Bitcoin’s recent price drop has led to several metrics reaching historical lows. The market is characterized by low liquidity and low trading volumes. While this makes it difficult for bulls to push the price through resistance levels, long-term holders may take the opportunity to accumulate more Bitcoin as market hype subsides.
Glassnode also notes that volatility, liquidity, trade volumes, and on-chain settlement volumes are at historical lows. This has resulted in a sense of apathy, exhaustion, and boredom among market participants. However, this could also lead to a potential short-term reversal, as the majority of short-term supply is currently in an unrealized loss.
Despite the potential for a reversal, sellers may emerge if the price starts to recover, particularly near the break-even level of short-term buyers around the $26,000 level.
Considering the price action of the DXY and the on-chain data provided by Glassnode, there is a possibility that buyers could return sooner than expected. This makes the current price action an interesting opportunity for opening long positions in Bitcoin.
It is important to note that this article does not provide investment advice or recommendations. Investing in Bitcoin and trading cryptocurrencies involves risk, and readers should conduct their own research before making any investment decisions.