Bitcoin more or less only consolidated after the dips of the week before last. Therefore, a legitimate question arises whether the consolidation from the previous week is a preparation for another dive. Or do the bulls still have a chance to defend the current level? Personally, I take the latest dip as a signal to turn. But I have no patent on the truth. There can really be a lot of those opinions. And the interpretation of what is happening in the market is different. But the fact is that the bitcoin exchange rate has broken out of a massive pattern, volumes have been falling for months, and the latest drop does not look like an isolated event. Accordingly, there are bearish technical factors that are objective.
Total Cryptocurrency Market Cap – Is This To Be A Bullish Trend?
After a very long time, I looked at the market capitalization of all cryptocurrencies. If you look at the chart, you can immediately see the problem. This is a monthly chart and from a larger perspective all that growth gives the impression of an ordinary pullback. And I don’t think it’s a feeling thing. The market did not even manage to wipe out 25% of the entire decline.
One positive point is that the price bounced back from the original all-time high of January 2018. The original ATH peaks tend to be very strong supports. Thus, the bulls have a non-negligibly strong support on their side. However, sellers also have confirmation that the band around USD 1.2 trillion plays the role of key resistance. Technically, there was a pullback to the mentioned level with a subsequent negative reaction to the touch. Then it’s kind of hard to assume that a bull market is going on.
Is Bitcoin Consolidating Before Another Drop?
As was said in the introduction, there was only pure consolidation going on last week. If we were to look at the lower time frame, we would see weaker pullback attempts there. However, they didn’t last long, so it’s not worth dwelling on them too much. All we need to know now is that Bitcoin is consolidating above the support band around $25,000. And perhaps already in the current week, we will find out if it was a consolidation before another decline. I wouldn’t really be surprised if the price formed a second wave downwards. And that roughly to levels around $22,000.
In conclusion
Although there has been a larger decline, this does not mean that we are immediately in a new dynamic phase of the market. At the end of June, bitcoin pumped by considerable numbers and since then the rate has not moved much. However, this was during the summer holidays, so with the onset of September, I hope the next move is close. You still have to be patient. And then you will be rewarded for it. Because I believe that the following months will be very interesting.
2023-08-28 09:00:00
#Analysis #Bitcoin #Consolidating #Drop
