Key Points:
- Spot Selling Dominates: Bitcoin’s price fell below $28,700 as continuous spot selling persisted, challenging support levels.
- Bearish Sentiment Grows: With $29,000 support weakening and a potential double top formation, caution among traders intensifies.
- Technical Factors in Focus: Traders are analyzing the interplay of key moving averages and market dynamics to predict Bitcoin’s trajectory.
Bitcoin’s price strength wanes as it drops below $28,700 amidst persistent spot selling, raising concerns among traders.
Bitcoin Traders Brace for Losses as $29,000 Support Breaks
Bitcoin’s price dipped below $28,700 shortly after the Wall Street opening on August 7, as continuous spot selling exerted downward pressure on BTC’s price action. Despite a shaky weekly close, BTC/USD returned closer to its August lows, sparking predictions of further downward movement after the ongoing sideways movement during the weekend.
Notably, derivatives trading at a premium over spot, combined with the ongoing spot selling and volatile price action, has raised caution among traders. The weakening of the $29,000 support level has added to the bearish sentiment. This situation has prompted traders to anticipate a potential drop in BTC’s price, especially considering the upcoming U.S. Consumer Price Index print on August 10.
Total BTC long liquidations surpassed $10.5 million on the day, while cross-crypto long liquidations stood at $60 million, according to data from CoinGlass.
Can BTC Price Avoid a 2023 Double Top?
On a broader perspective, traders are observing an intriguing setup for BTC/USD on weekly timeframes. The weekly candles are forming a potential double top formation, which, if confirmed, could have implications for BTC’s price trajectory. However, for Bitcoin to complete the classic M-shaped pattern, it might need to revisit the $26,000 region, potentially violating key moving averages like the 200-week SMA, 21-week EMA, and 50-week EMA.
Looks likely to retest the green zone below and possible break lower from there.
We had the 2 consecutive daily closes below support signaling further downside as likely. pic.twitter.com/TzTtMTvLB2
— Nebraskangooner (@Nebraskangooner) August 7, 2023
Traders and analysts are closely watching this scenario, especially the confluence support region between $26,000 and the current spot price. This support cluster might prevent the formation of a double top and instead facilitate a higher low on a weekly basis, potentially leading to further upward movement.
While the bearish sentiment prevails due to the current price action, the interplay of technical factors and market dynamics will play a crucial role in determining Bitcoin’s next moves.
As the crypto community watches these developments unfold, market participants remain cautious and vigilant amidst the evolving landscape of Bitcoin’s price action and market sentiment.
Conclusion
Bitcoin’s recent price drop below $28,700 amid endless spot selling has raised concerns among traders and analysts. The weakening of the $29,000 support level and the potential for a double top formation on weekly timeframes have led to caution within the crypto community. The coming weeks will offer insights into whether Bitcoin can avoid a double top scenario and find support to continue its upward trajectory.
[Note: The information provided is based on the given data and market conditions as of the provided date.]
