Bitcoin’s price is approaching a critical support level, and most indicators suggest that the price will soon rise.
Bitcoin’s price has undergone a correction in the past 24 hours, possibly due to increased liquidation.
Nevertheless, BTC is approaching a key support level that could reverse the trend in the coming days or weeks.
CoinMarketCap data shows that BTC has dropped over 3% in the past 24 hours. At the time of writing, BTC’s trading price is $60,862.71, with a market cap exceeding $1.2 trillion.
Popular cryptocurrency analyst Ali recently tweeted, revealing a possible reason behind this downward trend. According to the tweet, BTC liquidations have increased significantly, nearing the $61,490 level.
Whenever liquidations increase, it increases the chances of price adjustments. Therefore, investors may choose to exit positions after reaching this level.
The recent price drop has pushed BTC towards a critical support level.
AMBCrypto’s analysis of the daily chart reveals a widening wedge pattern that is trending downwards. If the economy continues to slump, investors may see BTC fall to $60,078.
At that point, BTC will have an opportunity for a rebound. If that happens, the price of the cryptocurrency king may gain momentum and reach $71,000 in the coming weeks or months.
Will BTC rebound soon?
AMBCrypto plans to examine on-chain data for Bitcoin to see if the coin is ready for a rebound. Our analysis of Glassnode data reveals an optimistic indicator.
It is worth noting that BTC’s Pi Cycle Top indicator suggests that the BTC price is below its possible market bottom. If this is true, BTC may soon turn bullish.
For the layman, the Pi Cycle indicator consists of the 111-day moving average (111SMA) and twice the 350-day moving average of Bitcoin’s price (350 SMA x 2).
In fact, according to CryptoQuant data, BTC’s net deposits on exchanges are lower compared to the average level of the past seven days. This indicates low selling pressure on BTC, which usually leads to price increases.
BTC’s Binary CDD is also in the green, indicating that long-term holders have been less active in the past seven days. They hold coins with motivation.
The situation in the derivatives market also looks good as BTC’s funding rate is increasing.
Chaikin Money Flow (CMF) is also slightly rising, indicating a high possibility of price increases.
However, the Relative Strength Index (RSI) has dropped significantly at the time of writing, supporting the bearish sentiment.