Bitcoin Chart Displays Conflicting Signals After Crypto Black Monday
Bitcoin experienced a significant drop in price on August 5th, reaching a multi-month low of $49,105. This decline marked a decrease of over 33% from its highest point this year. Although the price did recover slightly, reaching the $55,000 level, it remains in a bear market.
The prediction market is divided on the future of Bitcoin. According to Kalshi, a prediction platform supported by Charles Schwab, Sequoia, and Henry Kravis, 76% of participants in a poll expect the price of Bitcoin to finish the year below $50,000. Furthermore, 54% of participants anticipate the coin falling below $40,000, while 20% predict it dropping below $30,000.
Polymarket data also indicates a decrease in traders expecting Bitcoin to reach $100,000 this year. In March, 64% of poll participants held this expectation, but by Monday, the figure had dropped to 22%.
The cryptocurrency industry as a whole is facing challenges, resulting in the decline of Bitcoin and other cryptocurrencies. Recent data reveals that spot Bitcoin ETFs lost over $65.4 million in assets. Additionally, Bitcoin’s futures open interest decreased to $6.2 billion from last month’s high of $8.8 billion. On Monday alone, Bitcoin experienced $444 million in liquidations, contributing to the industry’s total of over $1.14 billion.
Despite these obstacles, major investment firms such as Blackrock, Fidelity, and MicroStrategy are not selling their Bitcoin holdings. In fact, MicroStrategy is even raising funds to acquire more coins.
Furthermore, there is a possibility that the Federal Reserve may lower interest rates before the September meeting, similar to what occurred in March 2020. Inflation rates have been decreasing while the unemployment rate has risen to 4.3%.
Analyzing Bitcoin’s price technicals, mixed data is observed. The daily chart shows that Bitcoin reached a peak of $73,955 and then dropped to $49,104 on August 5th. This lowest point is significant as it aligns with the highest point on January 11th. Furthermore, Bitcoin fell below the 200-day moving average, indicating that bears currently have control.
It is worth noting that Bitcoin has been forming a pattern of lower highs ($73,900, $72,000, and $70,000) as well as lower lows ($60,730, $56,900, and $50,775). Typically, this price action suggests further downward movement.
On a positive note, Bitcoin has also formed a falling broadening wedge pattern, which is a popular bullish sign. If Bitcoin surpasses the 200-day moving average and breaks above the upper side of the descending trendline, it would confirm further upside potential.
Conversely, if Bitcoin drops below the low from Monday, it would invalidate the wedge pattern and indicate more downside, with sellers targeting the 50% retracement level at $44,840.
In summary, Bitcoin’s price has experienced a significant decline, reaching a multi-month low. The prediction market is divided on its future, with many expecting further drops. Despite industry challenges, major investment firms are holding onto their Bitcoin holdings. Technical analysis shows mixed data, with both bullish and bearish indicators.
