Long position closeouts were successful in pushing the price of bitcoin below the 21-day and 21-day EMAs. Technical momentum on the daily calendar has weakened with the current sell-off.
The risk in the short term appears to be high, but it could also be a good long term buying opportunity. The overall trend of fundamentals and the chain remains bullish. We saw a slight distribution of older coins and miners, but there is still no sign of a more aggressive sale.
The previous weekly close was above $ 64.8,000, and it was a bullish signal, but an upward follow-up is also required for validation.
The long sell-offs and selling pressure have pushed the price of BTC below $ 64.8,000, increasing the downside risk in the short term.
BTC currently sits below $ 64.8,000 on an intra-week basis, and it’s important to see the bulls push it back above that level before the weekly close. The charts of the highest period remain bullish as the price hits higher and consistent highs and lows.
There is major support between $ 58.3K and $ 53K. These levels come together with strong technical and chain support. Price is currently testing the 50-day MA, which is a key level to maintain on the daily chart. Close below increases the short-term downside risk towards $ 57.6K, $ 57.1K, $ 56.8K, $ 55K and $ 53K.
It is essential that the bulls protect $ 53,000 as this level determines the larger technical structure of the chart. If we see aggressive distribution from long term holders and miners with price falling and closing below key support, the likelihood of further downside risk will increase dramatically.
There was a slight distribution of LTHs and miners, but not as aggressive as in later phases of the bull markets. This suggests that the current bull run has a lot of potential and is expected to last until the start of the first quarter of 2022.
The average age of the coins has slowly increased, but shows no signs of flattening. This tends to happen before a distribution trend begins, where LTHs and miners start to distribute consistently as the price increases.
Spot exchange and all foreign exchange reserves have shown a steady downward trend throughout the year, hitting new multi-year lows, even with multiple drawdowns this year.
This suggests that investors are buying BTC and withdrawing it from exchanges to a cold store, adding to the exhaustion of supply. This makes it increasingly difficult for large institutions looking to build billion dollar positions on BTC spot exchanges where supply remains low.
Noticeably enough, the STH SOPR has fallen below 1.0, indicating that short-term holders are taking losses. This suggests that buyers who rushed when BTC broke above $ 65,000 are now selling at a loss in panic. Currently, this pullback has been triggered by long sell-offs and weak losing hands.
Although near-term technical momentum has weakened, the overall trend in fundamentals and the chain remains firmly bullish, making this pullback a favorable buying opportunity for long-term investors.
LTHs and miners dispense lightly and without aggressiveness. As long as the bulls protect the $ 50,000 and older coins, the bull market is likely to continue and even expand beyond 2021, which opens the door for further highs for BTC.
For now, we have to see him hold the 50-day MA and where the price ends for the week versus previous all-time highs of $ 64.8,000.
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