Bitcoin is at a critical juncture after several days of recovery and consolidation. On August 5, it saw a sharp capitulation, with the price falling to a monthly low of $49,577. While some investors remain skeptical and believe that Bitcoin has yet to bottom, key data from CryptoQuant suggests that the worst may be over.
The broader market is now focused on the Federal Reserve’s upcoming decision on interest rates, which could have a significant impact on Bitcoin’s price performance. Investors are cautiously waiting to see if this week’s announcement will bring more certainty to the market. A favorable decision could serve as a catalyst for Bitcoin’s upward movement, pushing it past resistance levels.
However, the risk of further decline remains if Bitcoin fails to regain higher price levels in the near term. Breaking the key resistance around $60,000 will be crucial to regain bullish momentum.
Bitcoin decline is coming to an end
Bitcoin is currently trading just below $60,000, reflecting a period of recovery from recent local lows. This positive price action has fueled optimism among investors, who are beginning to believe that the long-term correction streak that began in March may be coming to an end.
Analysts, including top experts, have suggested that the bottom was likely reached on August 5, which could mark a potential turning point for Bitcoin. A well-known CryptoQuant analyst, Axel Adler, a specialist in on-chain and macro research, has shared insightful data about X which suggests that Bitcoin may indeed have bottomed.
The analyst’s chart shows a significant drop in the Mayer Multiple, from 1.82 at $73,000 to 0.9 points. A further drop to 0.7 points would confirm a local bottom. This indicator has historically been used to identify market bottoms and potential reversals.
A climate of fear and uncertainty has characterized recent price action, but this sentiment is beginning to shift. On September 15, the Fear and Greed Index showed a neutral level for the first time since August 26, indicating a possible stabilization in market sentiment.
With Bitcoin price heading towards $60,000 and showing signs of recovery, the market is starting to adjust its outlook. This suggests that the worst of the corrections are behind us and that a new growth phase is dawning.
BTC Technical Levels to Watch
Bitcoin (BTC) is currently trading at $59,003 after a minor 5% drop from last Friday’s local high. The price is facing resistance as it struggled to close above the 4-hour 200 exponential moving average (EMA) of $58,848, and tested this level from below. This EMA is a key indicator of short-term market strength, and it would be essential for BTC to regain momentum.
To challenge the current market structure, BTC needs to break through the $60,000 barrier, a psychological level that could generate significant buying pressure if broken with conviction. A strong move above this level would signal a renewed uptrend, encouraging more investors to enter the market.
However, if BTC fails to close above the 4H 200 EMA, a deeper correction could follow. The price would likely target $55,500, a key demand level where buyers could step in to find support. This level is crucial as it could trigger a change in structure, which defines Bitcoin’s long-term price direction.
Main image of Dall-E, chart from TradingView