Bitcoin [BTC] Bears showed weakness at the beginning of August after failing to push towards the support line. Fast forward to the present and a similar observation has occurred with bulls.
This confirms the weakness of the structure, but also the increasing uncertainty about BTC’s next move.
After briefly pushing above $25,000, the Bitcoin bulls failed to sum up the additional upside. Instead, the King’s coin adopted a pullback from the press time price of $23,806.
However, this week’s downward performance also appears to be limited.
A closer look at its indicators reveals that Bitcoin may be heading for further declines at first glance.
For example, the Relative Strength Index (RSI) has crossed below the 14-day simple moving average, confirming weak momentum on the side of the bulls.
The RSI is also moving within the trend line and this may also provide a rough idea of the direction of BTC.
Bitcoin’s RSI is retesting its support line, from which it has bounced back within its ascending range. However, it has already slightly crossed this line at the time of publication, which indicates a high probability of a breakout from the model.
The current result does not necessarily mean that Bitcoin is headed for further declines. There is still a chance for a bounce from the support level. However, on-chain metrics may be more appropriate to explain the current outcome and potential trend.
Where does Bitcoin’s downward pressure come from?
Purpose Bitcoin ETF holdings reduced the BTC balance by about 3,398 BTC from August 11 to August 16.
That’s roughly $81 million of selling pressure. While this may not be much compared to the market cap of Bitcoin, it could have a significant impact if the amount of BTC on exchanges is low.
Cumulative selling pressure from other shareholders may also contribute to more downsides.
Addresses with more than 1,000 BTC also contributed to the selling pressure in the past few days.
The number of titles in the above category has been reduced by three over the past three days.
While this may not indicate much selling pressure, if these three addresses sell all of their bitcoins at their current market value, we would expect selling pressures of over $70 million.
Meanwhile, sending addresses, time of publication, and receiving addresses outnumbered. This is in line with the increased selling pressure over the past few days.
Well, the note confirms the price drop in the past few days. However, there is still a remarkably strong demand for Bitcoin.
No outcome is still possible at this point. But in the event of more downsides, investors should look for support in the $22,000-$22,600 range. An alternative outcome could push BTC back above $25,000.
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