CoinDesk Report:
As of the time of writing, the price of Bitcoin is $57,100. After rising to $64,000 earlier this week, it has fallen over 9.5% in the past three days.
From the chart, it is evident that Bitcoin’s price dropped sharply from a high of $63,223 on July 2nd to an intraday low of $56,709 on July 4th.
Bitcoin has declined by 18% in the last 30 days, with its daily trading volume decreasing by 32% over the same period. However, multiple indicators suggest Bitcoin may experience a deeper pullback, making quick recovery from these losses unlikely in the coming days.
Setting a target of $50,000 for Bitcoin
Thus, the continued downward trend of Bitcoin aligns with predictions, potentially marking the bottom for BTC prices. This significant decline may just be the beginning, with Bitcoin possibly further dropping to $50,000.
Breaking through the psychological barrier of $60,000 to $50,000 marks a significant shift in market sentiment.
Forecasts indicate Bitcoin may break through consolidation ranges and drop towards $50,000, possibly forming a double-top pattern.
A double-top pattern refers to the price reaching two similar peaks, with a slight decline in between, holding support above a common line called the “neckline”. When the price falls below this neckline, the pattern typically dissipates, with the decline potentially equaling the distance between the peak and the neckline.
Bitcoin price loses key support at $58,000
Bitcoin dropped from an opening price of $60,145 to an intraday low of $56,709, breaking below the 200-day Exponential Moving Average (EMA), a support it has enjoyed for over 10 months.
Commenting on the latest price trend, Bitcoin has for the first time in 10 months dropped below its 200-day Moving Average (MA).
The 200-day average is a crucial defense line for Bitcoin, and losing it could expose BTC to further risks. Data from blockchain analytics firm IntoTheBlock shows Bitcoin’s path of least resistance is downwards.
The In/Out of the Money Around Price (IOMAP) chart below shows Bitcoin faces greater resistance on the upside compared to the support it receives on the downside.
Potential support is above $50,000, with approximately 747,140 addresses previously purchasing about 264,360 BTC. This suggests downside potential for Bitcoin may be limited here.
Bearish flags for Bitcoin set downside target below $50,000
Technically, Bitcoin’s price action has led to the formation of a classic bear flag pattern, a bearish continuation pattern formed within an upward range after a sharp decline in price.
Bear flags typically disappear when prices break below the downward trendline and fall to the height of the previous downtrend. This sets a downside target for Bitcoin’s price at $49,200—a level last seen on February 12th.
Additionally, Bitcoin’s daily Relative Strength Index (RSI) is in oversold territory at 29. This explains the intensity of continued selling pressure, increasing the likelihood of BTC reaching the bear flag target.
Conclusion
I believe Bitcoin’s decline is inevitable; nothing can always be profitable. As for how far it can fall, I cannot personally determine that. I suggest closely monitoring Bitcoin’s movements and trends to make timely decisions and mitigate significant impact on profits. I personally think it will rise later, based on the simple adage: what goes down must come up.