- Bitcoin’s price was about to reach a crucial support level.
- Most figures pointed to a soon price increase.
Bitcoin [BTC] witnessed a price correction in the last 24 hours. An important reason for this could be the increase in the number of liquidations.
Nevertheless, BTC was approaching a crucial support level from which it could make a trend reversal in the coming days or weeks.
Why Bitcoin is in trouble
CoinMarketCaps facts revealed that BTC has fallen by more than 3% in the past 24 hours. At the time of writing, BTC was trading at $60,862.71 with a market cap of over $1.2 trillion.
Ali, a popular crypto analyst, recently posted one tweet revealing a possible reason behind this downward trend. According to the tweet, BTC liquidation rose sharply near the $61,490 mark.
When liquidation increases, it increases the likelihood of a price correction. Therefore, investors might have chosen to exit their positions after reaching that level.
This recent price drop has pushed BTC to a critical support level.
AMBCrypto’s analysis of the coin’s daily chart revealed a widening and descending wedge pattern. If the downturn continues, investors could witness a drop in BTC to $60,078.
At that point, BTC would have a chance to recover. If that happens, the price of the king of cryptos could gain bullish momentum and reach $71,000 in the coming weeks or months.
Source: TradingView
Will BTC recover quickly?
AMBCrypto then planned to look at the King Coin’s on-chain data to see if the coin was ready for a rebound. Our analysis of Glassnode’s data revealed a bullish statistic.
Notably, BTC’s Pi Cycle Top indicators pointed out that BTC’s price was trading below its possible market bottom. If true, BTC could turn bullish soon.
FFor the uninitiated, the Pi Cycle indicator consists of the 111-day moving average (111SMA) and a two-fold multiple of the 350-day moving average (350 SMA x 2) of Bitcoin’s price.
Source: Glassnode
In fact, according to CryptoQuant’s factsBTC’s net deposits on the exchanges were low compared to the average of the past seven days. This clearly meant that selling pressure on BTC was low, which usually results in price increases.
BTC’s binary CDD was also in the green, meaning that long-term holders’ moves over the past seven days were lower than average. They have a motive to hold on to their coins.
Things in the derivatives market also looked good as BTC funding rates rose.
Source: CryptoQuant
Read Bitcoins [BTC] Price prediction 2024-25
The Chaikin Money Flow (CMF) also recorded a slight increase, suggesting that the chances of a price increase were high.
However, the Relative Strength Index (RSI) supported the bears as it plummeted sharply at the time of writing.
Source: TradingView