BTC could drop to $52,000 if this support level is broken

Bitcoin price has not recovered above the $64,000 resistance level since its major drop in the first week of August.

However, there are several levels of support available to turn things around.

Technical Analysis

By TradingRage

The daily chart

On the daily chart, the asset has consolidated below the 200-day moving average around $64,000. With the market losing the $64,000 and $60,000 levels, the cryptocurrency is close to dropping to the $56,000 support level. In the meantime, this line will now act as the main support holding up the entire market, preventing a deeper fall.

However, market momentum is bearish, with the RSI showing values ​​below 50%. Hence, a breakdown of the $56,000 level could be likely, leading to a further decline towards $52,000 in the short term.

The 4 hour chart

Looking at the 4-hour chart, the price of bitcoin has gradually declined within a bearish wedge pattern. However, it seems to have found support at the $56,000 support zone and is breaking the wedge to the upside. If a valid breakout occurs, the market will likely rise towards the $60,000 level in the coming days, with a higher probability of breaking above that time.

Chain analysis

By TradingRage

Bitcoin Miner Reserve

Although the price chart shows a long period of consolidation, the behavior of bitcoin miners can provide some clues about the future direction of the market.

This chart presents the bitcoin miner reserve metric, which measures the amount of BTC miners have. As evident during the last phase of the recent bull run, the metric has fallen significantly. This aggressive distribution by miners may be one of the main reasons for the current correction.

Meanwhile, judging by the shape of the mining stock’s 7- and 14-day exponential moving averages, they appear to have eased their selling pressure as the metric is taking a turn to the upside. This can be good news for investors as the oversupply of miners would decrease.

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