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Five Charts Explain the Decline

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As Bitcoin (BTC) struggles to reclaim the $60,000 psychological level, the on-chain data provider CryptoQuant has highlighted five key charts that illustrate the recent price drop.

The crypto markets are in turmoil, leaving traders on edge as Bitcoin’s price sends mixed signals. Analysts are divided on whether the market is heading for a correction or set to continue its uptrend.

Five Charts to Explain the Latest Bitcoin Price Drop

Bitcoin has slipped below the critical $60,000 psychological level, extending its decline after a recent surge above $65,000. A closer look at the underlying fundamentals reveals intriguing dynamics as traders and investors navigate the market conditions.

Short-term Holders Cash in at Break-Even

According to CryptoQuant, Bitcoin short-term holders established a resistance wall at their break-even price, indicating they took profits. The break-even price is where traders neither gain nor lose, with the asset trading near their purchase price.

This strategic profit-taking followed Bitcoin’s earlier price drop, which had caused short-term holders to incur a 17% loss. When the price rebounded to their average cost basis, these holders sold around their break-even prices. The resulting selling pressure contributed to the latest price drop.

Bitcoin price correction as short-term holders sell at break-even, Source: CryptoQuant
Bitcoin Price Correction as Short-Term Holders Sell. Source: CryptoQuant

Increased Open Interest and Positive Funding Rates

CryptoQuant also reports a premium on Bitcoin perpetual contracts, with open interest rising by 31% since August 5, moving from $13.5 billion to $17.9 billion. Open interest represents the total number of open positions, reflecting futures traders’ predictions about the next market move.

In a liquid market, high open interest typically results in better execution prices, tighter bid-ask spreads, and reduced slippage, providing traders with enhanced market efficiency and easier entry and exit opportunities. The 31% increase in open interest suggests growing market participation and heightened interest in Bitcoin.

Read more: Where To Trade Bitcoin Futures: A Comprehensive Guide

Open Interest, Source: CryptoQuant
Bitcoin Open Interest. Source: CryptoQuant

At the same time, funding rates remained positive, indicating that long positions (buyers) were paying short positions (sellers) to maintain their positions. This scenario reflects market conditions where demand exceeds supply.

Funding Rates, Source: CryptoQuant
Bitcoin Funding Rates. Source: CryptoQuant

The combination of rising open interest and positive funding rates can destabilize traders’ positions, primarily due to increased speculative activity. As more participants enter and exit positions in an attempt to capitalize on potential price movements, volatility escalates, causing sudden shifts in market sentiment.

This dynamic can create a feedback loop, where growing market participation fuels further price movements. As a result, herd behavior and momentum trading amplify market trends, making it increasingly difficult to predict and manage risks effectively.

Increased Spot Inflows

Research indicates that increased Bitcoin inflows into spot exchanges during the price drop further contributed to the decline, as traders viewed it as a sign of impending selling pressure. When investors transfer their holdings to exchanges, it is often seen as an intent to sell.

This influx added strain to already fragile futures positions. According to CryptoQuant’s Head of Research, Julio Moreno, these inflows were attributed to large holders, amplifying the pressure on the market.

Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030

Exchange Inflow, Source: CryptoQuant
Bitcoin Exchange Inflows. Source: CryptoQuant

As shown in the chart above, the rise in spot exchange inflows coincided with price drops, reinforcing the thesis.

This increase in Bitcoin supply available for trading on exchanges means more sellers are offering their BTC for sale. When supply outpaces demand from buyers, it exerts downward pressure on the price, contributing to the decline.

Shaking Off Weak Hands

The series of events has led to “weak hands” exiting their positions, resulting in increased liquidations. Ethereum and Bitcoin longs were liquidated for $55 million and $90 million, respectively, marking the highest levels of liquidation since August 5, according to research.

Bitcoin Long Liquidations, Source: CryptoQuant
Bitcoin Long Liquidations. Source: CryptoQuant

CryptoQuant’s research suggests that the market will need time to stabilize before a clear directional bias can emerge. As of this writing, Bitcoin is trading at $59,118, down nearly 5% since the Wednesday session began, according to BeInCrypto data.

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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Solana (SOL) Rallies Strongly, Setting Sights on $200

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Solana started a fresh increase above the $172 support zone. SOL price is rising and might soon aim for a move toward the $200 level.

  • SOL price started a fresh increase after it settled above the $165 level against the US Dollar.
  • The price is now trading above $172 and the 100-hourly simple moving average.
  • There was a break above a key bearish trend line with resistance at $162 on the hourly chart of the SOL/USD pair (data source from Kraken).
  • The pair could continue to rise if it clears the $192 resistance zone.

Solana Price Starts Fresh Rally

Solana price formed a support base and started a fresh increase above the $162 level like Bitcoin and Ethereum. There was a strong move above the $165 and $172 resistance levels.

There was a break above a key bearish trend line with resistance at $162 on the hourly chart of the SOL/USD pair. The price even cleared the $185 level. A high is formed at $192 and the price is now consolidating gains. It is trading above the 23.6% Fib retracement level of the upward move from the $155 swing low to the $192 high.

Solana is now trading above $172 and the 100-hourly simple moving average. On the upside, the price is facing resistance near the $192 level. The next major resistance is near the $195 level.

Solana Price

The main resistance could be $200. A successful close above the $200 resistance level could set the pace for another steady increase. The next key resistance is $212. Any more gains might send the price toward the $220 level.

Another Dip in SOL?

If SOL fails to rise above the $192 resistance, it could start a downside correction. Initial support on the downside is near the $188 level. The first major support is near the $180 level.

A break below the $180 level might send the price toward the $172 zone or the 50% Fib retracement level of the upward move from the $155 swing low to the $192 high. If there is a close below the $172 support, the price could decline toward the $165 support in the near term.

Technical Indicators

Hourly MACD – The MACD for SOL/USD is gaining pace in the bullish zone.

Hourly Hours RSI (Relative Strength Index) – The RSI for SOL/USD is above the 50 level.

Major Support Levels – $188 and $185.

Major Resistance Levels – $192 and $200.



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Will Bulls Push It Higher?

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Ethereum price started a fresh surge above the $2,650 resistance. ETH is up over 10% and might aim for a move above the $2,850 resistance.

  • Ethereum started a fresh surge above the $2,650 resistance zone.
  • The price is trading above $2,700 and the 100-hourly Simple Moving Average.
  • There is a new connecting bullish trend line forming with support at $2,730 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair could continue to rise if it settles above $2,850 and $2,880.

Ethereum Price Extends Surge

Ethereum price started a fresh increase above the $2,550 resistance like Bitcoin. ETH was able to climb above the $2,550 and $2,650 resistance levels to move into a positive zone.

It even surged above the $2,720 level in the past few sessions, beating BTC. It is up over 10% and there was a move above $2,800. A high is formed at $2,848 and the price is showing signs of more upsides. It is holding gains above the 23.6% Fib retracement level of the upward move from the $2,357 swing low to the $2,848 high.

Ethereum price is now trading above $2,700 and the 100-hourly Simple Moving Average. There is also a new connecting bullish trend line forming with support at $2,730 on the hourly chart of ETH/USD.

On the upside, the price seems to be facing hurdles near the $2,850 level. The first major resistance is near the $2,880 level. The main resistance is now forming near $2,950. A clear move above the $2,950 resistance might send the price toward the $3,000 resistance.

Ethereum Price
Source: ETHUSD on TradingView.com

An upside break above the $3,000 resistance might call for more gains in the coming sessions. In the stated case, Ether could rise toward the $3,250 resistance zone.

Are Dips Supported In ETH?

If Ethereum fails to clear the $2,850 resistance, it could start a downside correction. Initial support on the downside is near the $2,800 level. The first major support sits near the $2,720 zone and the trend line.

A clear move below the $2,720 support might push the price toward $2,650. Any more losses might send the price toward the $2,550 support level in the near term. The next key support sits at $2,500.

Technical Indicators

Hourly MACDThe MACD for ETH/USD is gaining momentum in the bullish zone.

Hourly RSIThe RSI for ETH/USD is now above the 50 zone.

Major Support Level – $2,850

Major Resistance Level – $2,720



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Bitcoin Price Pushes Rally Further: Bulls in Full Force

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Bitcoin price is gaining pace above $74,000. BTC is trading in a bullish zone and might rise further above the $76,500 resistance zone.

  • Bitcoin started a fresh surge above the $73,500 zone.
  • The price is trading above $73,000 and the 100 hourly Simple moving average.
  • There is a connecting bullish trend line forming with support at $75,250 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could continue to rise above the $76,000 resistance zone.

Bitcoin Price Extends Rally

Bitcoin price started a fresh surge above the $73,500 level. BTC even cleared the $75,000 resistance and traded to a new all-time high. It posted a high at $76,457 and is currently consolidating gains.

There was a minor decline below the $76,000 level. The price dipped below the 23.6% Fib retracement level of the upward move from the $72,747 swing low to the $76,457 high. However, the price is still in a positive zone above the $73,500 level.

Bitcoin price is now trading above $74,000 and the 100 hourly Simple moving average. There is also a connecting bullish trend line forming with support at $75,250 on the hourly chart of the BTC/USD pair.

On the upside, the price could face resistance near the $75,800 level. The first key resistance is near the $76,000 level. A clear move above the $76,000 resistance might send the price higher. The next key resistance could be $76,500.

Bitcoin Price
Source: BTCUSD on TradingView.com

A close above the $76,500 resistance might initiate more gains. In the stated case, the price could rise and test the $78,000 resistance level. Any more gains might send the price toward the $78,800 resistance level.

Are Dips Supported In BTC?

If Bitcoin fails to rise above the $76,000 resistance zone, it could continue to move down. Immediate support on the downside is near the $75,250 level and the trend line.

The first major support is near the $74,150 level or the 61.8% Fib retracement level of the upward move from the $72,747 swing low to the $76,457 high. The next support is now near the $73,500 zone. Any more losses might send the price toward the $72,000 support in the near term.

Technical indicators:

Hourly MACD – The MACD is now gaining pace in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now above the 50 level.

Major Support Levels – $75,250, followed by $74,150.

Major Resistance Levels – $76,000, and $76,500.



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