BTC loses momentum with possible price drops to $56,000 and $52,000

The price of Bitcoin has shown a willingness to go lower. However, market fundamentals point to something different.

BTC is down almost 10% in the past week, currently struggling to stay above $58,000.

Technical Analysis

By TradingRage

The daily chart

On the daily chart, the asset has been consolidating around the $60,000 level, following a rejection of the $64,000 resistance line and the key 200-day moving average, which is around the same price . Currently, the market is likely to test the $56,000 support level.

The RSI indicator has also fallen below the 50% level, indicating a slight downside momentum. Therefore, if the $56,000 level is not able to sustain the price, a further decline towards the $52,000 support zone would be expected.

The 4 hour chart

If we look at the 4-hour chart, it is clear that the market has not been able to return to the $68,000 resistance level, which it initially broke down, as the $64,000 resistance zone has rejected the price to the downside. As things currently stand, a retest of the $56,000 level looks very likely.

However, the cryptocurrency could recover from the level as the market structure shows signs of weakness in the bearish trend.

Chain analysis

By TradingRage

Bitcoin Exchange Reserve

Although the price of bitcoin has gone through a long period of consolidation over the past few months, investors are wondering whether the market is experiencing a period of accumulation or distribution.

This chart shows the Bitcoin Exchange Reserve metric, which measures the amount of BTC held in exchange wallets. Since these coins can be sold quickly, they are supposed to be an indicator of supply.

As the chart suggests, the foreign exchange reserve metric has trended downward rapidly since the start of the consolidation, indicating that a build-up phase is underway.

As Bitcoin reserves continue to decline significantly, the chances of a reduction in supply, which may lead to another price rally, increases significantly. However, futures market conditions also play an important role in price action, and should be carefully considered before any conclusions are drawn.

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