The “fatal drop” in Bitcoin price continues to characterize what happened after last week’s BTC crash. However, a popular analyst expects the BTC price to bounce in a ‘V shape’. Also, another analyst says that a metric that predicts BTC’s 2023 rise has turned green.
The “fatal drop” in Bitcoin price is back!
As you can follow on Kriptokoin.com, BTC headed south on the third day of sideways performance. Despite being oversold by relative strength index (RSI) values, Bitcoin refused to offer any rebound bounces from levels last seen two months ago. Market participants are restless. Popular analyst Jelle refers to intraday movements as “death chops.”
“At this stage, it feels like a game of chicken to see who will make a move to crack the chop,” said tracking resource Material Indicators. Analyzing the liquidity in the Binance BTC/USD order book, Material Indicators points out a wide liquidity shortage that increases the potential for a sharp move in either direction. In this context, he underlines the following points:
The market is waiting to see if more buying or selling liquidity will be pulled into the range. So far, we are seeing small amounts of bid liquidity ladder upward from $20,000 near the active trading zone. But liquidity of any magnitude (new or moved) did not pile into the range defending a Lower Low price.
This pushes BTC to levels below $20,000
However, it had potentially very serious consequences for the bulls. A lower bottom (LL) was prone to risk even the $20,000 support forward. Material Indicators said, “It goes without saying. Printing an LL on this TF has macro effects. Printing 2 LLs will push Bitcoin (BTC) to levels below $20,000,” he said.
BTC/USD order book data for Binance explanatory chart. Source: Material IndicatorsRSI reinforces “V-shaped recovery” argument
The farther away, the hope remains that Bitcoin can recover the overall uptrend. Michaël van de Poppe, founder and CEO of trading firm Eight, points to the oversold signals generated by RSI in an exclusive YouTube post on Aug. On the 12-hour timeframes, the RSI was below 19 at the time of writing. This is close to its lowest levels since the bottom of the 2018 bear market. Daily levels have similarly hit their lowest levels since the March 2020 Covid-19 cross-market crash.
Van de Poppe, about the previous Bitcoin price crashes, said, “Every time we see such a movement, there is a kind of V-shaped recovery. It finds balance on higher ground,” he says. He adds that it is “very likely” that BTC will make a reversal to focus on $26,500 or more from now on.
BTC/USD 12-hour chart with RSI. Source: TradingView“The current Bitcoin price action reminds me of September 2020. Just before the start of the previous bull market. Absorption and slowly rising for a while. I predict that this will happen in a similar way.” makes the statement.
BTC benchmark chart. Source: JelleRHODL lights green signal for Bitcoin!
Philip Swift, the founder of LookIntoBitcoin, an on-chain analytics platform, is also hopeful about Bitcoin. His hope rests on one metric: RHODL (Realized HODL). Analysts use this metric to determine the long-term trend. Swift says RHODL is signaling positive and the uptrend is still intact. In this context, the analyst makes the following statement:
Pullbacks = opportunities in bull markets. Bitcoin Realized Cap HODL Waves indicate that the recent price drop is in the context of a much larger bull trend. 3-6 month band is trending upwards as new money returns to the market = new bull cycle.
Pullbacks = opportunities in bull markets.
h/t @cburniske #bitcoin Realized Cap HODL Waves showing that the recent price dip is in the context of a much bigger bull trend.3-6 month band trending up as new money comes back into the market = new bull cycle. pic.twitter.com/Tq04ROW2x6
— Philip Swift (@PositiveCrypto) August 22, 2023
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