CoinWorld reported:
The price of Bitcoin has been falling sharply recently, breaking through an important support level. If it does not recover soon, the situation in the cryptocurrency market may worsen.
Technical Analysis
By TradingRage
Daily Chart
As shown in the daily chart, the price of Bitcoin failed to hold above the important support level of $60,000 and fell below the 200-day moving average, which is around $58,000.
This is an extremely concerning signal because it is well known that the 200-day moving average supports the price during a Bitcoin bull market.
Therefore, if the support level of $57,000 fails to prevent further decline and the price fails to recover above the 200-day moving average, a deeper decline is more likely to occur.
Source: TradingView
4-Hour Chart
Within the 4-hour timeframe, after the support zone at $60,000 was breached, the price quickly fell below $57,000.
At the same time, this level seems to have prevented further decline, and the RSI indicator has entered the oversold zone. These signs indicate that a recovery may occur in the short term, or at least a fallback to the $60,000 level.
Source: TradingView
Sentiment Analysis
By TradingRage
Bitcoin Funding Rate
With the significant drop in BTC price, many market participants either voluntarily exited their long positions or were hit by stop-losses. As indicated by the funding rate indicator, some futures market traders have also opened short positions.
The funding rate indicates whether the buy side or the sell side has executed more orders. After months of decline, the funding rate is currently negative.
Although this is a concerning signal, it can also be seen as the first sign of a price bottom, similar to previous cases where the indicator showed negative values.
Therefore, although caution is advised, there may also be a brief liquidation cascade in the next few days, and the price may quickly rebound.
Source: CryptoQuant
