The price of Bitcoin (BTC) is down roughly 8% on the last trading day, pushing losses from July highs to roughly 20%, looking at the developments in the daily chart. As it is, the path of least resistance is defined to be southwards, with the sell-off triggering massive liquidations across the board.
Sellers are in the driving seat, and BTC is within a bear breakout formation following the break below the bull flag on Aug 17.
At this pace, bears will reverse gains made from mid-June to mid-July 2023 and might see the coin drop off to June 2023 lows, perhaps in continuation of the strong sell-off from last year.
Why is BTC Falling?
The contraction across the board is magnifying losses in altcoins and pumping USDT trading volumes.
Trackers show that USDT’s trading volumes are up more than 50% and are the highest traded assets in the past trading day. This is expected considering its status in the industry and role as a safe haven.
For now, traders are also pinning the drop on macroeconomic factors and the probability of the Federal Reserve (Fed) hiking rates even further despite cooling inflation readings.
While inflation has been dropping, it is well above the 2% benchmark rate. As such, the Fed might intervene to preserve purchasing power.
The situation is further made worse by the collapse of Evergrande, a real estate firm in China. Amid this, SpaceX has sold off their BTC holdings, a net negative as it might set a precedence for others. A vote of confidence is that, per the latest earning reports, Tesla still holds some BTC.
Bitcoin Price Analysis
BTC is under significant selling pressure, looking at the price performance in the daily chart. Even though sellers appear to be in control, buyers have a chance from a top-down preview.
BTC prices are still within the $25k to $31.8k trade range from June to July 2023. However, in the medium term, Bitcoin is within a bear breakout formation following the slip below the base of the bull flag at $28.5k
At this pace, traders might look to sell on attempts higher towards $28.9k or Aug 17 highs, with targets at yesterday’s lows at $25k in the short term. Any break above yesterday’s highs will invalidate this outlook.
Conversely, sharp losses below June lows may trigger another wave of selling that might push Bitcoin towards $20k, or worse, November 2022 lows in a bear-trend continuation formation.
Technical charts courtesy of Trading View.
Disclaimer: The opinions expressed do not constitute investment advice. If you wish to make a purchase or investment we recommend that you always conduct your research.
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