Bitcoin Back Above $55k: Can It Regain the Uptrend?

• Bitcoin prices sharply declined, falling from $58,000 to below $50,000 before recovering to around $55,000.
• The drop in Bitcoin’s value reflects a souring of market sentiment, with the Crypto Fear and Greed Index falling significantly.
• Over $740 million in leveraged positions were liquidated in the last 24 hours, primarily affecting traders with leveraged exposure to Bitcoin and Ether.

prices nosedived following excessive selling in the Asian session as market sentiment soured. This was the first Asian session since the US last week, and markets were clearly concerned.

The crypto market is often viewed as a good indicator of market sentiment, and Bitcoin’s plunge from $58,000 to $53,000 within two hours revealed a lot. The selloff extended to a range of risk assets, with Bitcoin briefly dipping below the $50,000 mark.

The world’s largest cryptocurrency has since recovered and is trading around the $55,000 mark at the time of writing.

The Crypto Fear and Greed Index is now at 24 which is a sharp drop from the 74 we recorded a week ago.

Source: FinancialJuice

The sharp downward move in the Asian session led to over $740 million in leveraged positions being wiped out across the crypto market in the last 24 hours, with more than $644 million in leveraged longs being liquidated, according to CoinGlass data.

Notably, traders seeking leveraged exposure to were the hardest hit, with over $256 million in ETH longs liquidated, while $231 million in BTC longs were forcibly closed.

Source: Coinglass, Cointelegraph

The US session has brought relief to markets as sentiment appears to have improved. US indices rising nicely with the recovering a significant chunk of its pre-market losses. Market participants in some quarters may be eyeing this as a potential ‘buy the dip’ opportunity as we have heard in the past.

Similar sentiments were echoed by JPMorgan’s head of positioning intelligence, John Schlegel said,

“Overall, we think we’re getting close to a tactical opportunity to buy-the-dip and our Tactical Positioning Monitor could dip further in the next few days. That said, whether we get a strong bounce or not could depend on future macro data.”

Overall, Bitcoin enthusiasts remain bullish over the medium and longer term given that markets are pricing in more aggressive rate cuts. This usually leads to a positive run for crypto as market participants will have more money in their pocket. Whether the lows are in and the selling is over, remains to be seen.

Technical Analysis BTC/USD

From a technical perspective, Bitcoin did not close below the $50,000 mark on the H4 or Daily chart, which is crucial. A candle close below $50,000 is necessary for Bitcoin to test the $45,000 support area. Below this, there’s a key support zone around the $43,000 level, where the rally to all-time highs began back in February.

If the $50,000 level holds, Bitcoin could continue to advance, with immediate resistance at the 56,561 and 58,586 levels. A push beyond these levels will shift focus to the 50, 100, and 200-day moving averages (MAs), which all lie within a $3,000 range between 61,538 and 64,350.

Support

Resistance

Bitcoin () Daily Chart, August 5, 2024

Source: TradingView.com

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