After the Bitcoin (BTC) price hit $68,000 on June 24, it started a downtrend as the weekly and daily charts turned red.
At the same time, a key indicator showed that the Bitcoin price had broken a key support level and was facing a decline. This could lead to a further price correction in the coming days.
Assessing Bitcoin’s Future Prospects
According to data from CoinMarketCap, the Bitcoin price has fallen by almost 4% in the last seven days. At the time of writing, each Bitcoin unit is trading at $65,243.97, with a total market capitalization of over $1.28 trillion.
Surprisingly, despite the recent price drop, a large portion of Bitcoin’s supply remains profitable. AMBCrypto previously reported that 87% of the total Bitcoin supply is generating profits.
This could indicate the market’s tendency to correct the price towards the average price range of $54,930. Based on this, AMBCrypto intends to assess the possibility of a drop to $54,000 by taking a closer look at Bitcoin’s current situation.
Is a price correction inevitable?
A review of CryptoQuant data by AMBCrypto revealed that Bitcoin reserves on exchanges are decreasing. This shows that the selling pressure on this digital currency is relatively low.
According to the Miner Position Index, miners are selling fewer assets than the annual average. This theme shows the optimism of miners about the rise in the Bitcoin price and their willingness to maintain it.
The situation on the derivatives market is also assessed positively. For example, the supply/demand ratio in this market is bullish, which means that the buying trend is prevailing in the derivatives market.
In addition, the funding rate of Bitcoin is also increasing. This shows that long traders are dominant and willing to pay money to short traders.
According to our analysis of the daily chart of Bitcoin, its Relative Strength Index (RSI) is showing an upward trend with an increasing value. A similar bullish trend can be observed on the Chaikin Cash Flow (CMF) chart of this digital currency.
These indicators could indicate the possibility of a price increase in the near future.
However, the Cash Flow Ratio (CMI) is showing a downward trend as it is decreasing. This indicator shows the continuation of the price decline that could see Bitcoin fall to $54,000.
It should be noted that technical analyses always involve a certain degree of uncertainty and should not be the sole basis for financial decisions.
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