Bitcoin Price Analysis: Will BTC Record a Deeper Low this Month?

The price increase Bitcoin enjoyed may put many in a relaxed state. However, there are many who believe the apex coin is only going through this phase for a short while which may end soon.

Why do some traders maintain that the worst is yet to come? Let’s look at some factors

China/U.S. Tension

There is no doubt that the price correlation between BTC and other traditional assets is at its peak. Based on that these assets price movements will also translate to the top coin. With that in mind, most analysts voiced concerns over the state of the stock market.

Today, the United States made a daring move on China. Both nations are in a dispute over the ownership of Taiwan. Pushing the boundaries further, a U.S. envoy landed in the disputed territory.

As a result of this move, the tension between both countries are sky high. In response, the stock market is currently on a downtrend. We are also seeing the same response with the crypto market as most assets are down by a few percent.

The decrease is threatening to keep larger as more news on the agitated countries will continue to make waves; thereby spreading fear in both markets. This may be a clear indication that fundamentals agree with the bearish speculations.

Bitcoin is at Risk of Massive Retracement

The previous section talked about fundamentals. We will look at what the charts say. One of the first indicators we will review is the Moving Average Convergence Divergence. Recall that a previous article pointed to the matric enjoying significant improvements.

The write-up also hinted at a possible danger the asset may face. It stated that BTC had some bearish convergence which failed to result in a divergence. We may see a full bearish divergence in the next few days.

The image above sheds more light on the situation the apex coin is facing. We observed that the histogram associated with MACD is gradually decreasing which shows a steady decrease in buying pressure.

Additionally, bitcoin has lost a few percent over the last five days, bringing the 12-day EMA closer to intercepting with the 26-EMA. Zooming in on the said indicator, we may conclude that the bearish convergence is almost done.

A closer look at the Relative Strength Index reveals another scary fact. The metric has resumed its downtrend due to worsening conditions crypto market. Currently threading above 50, we may see it dip as low as 40.

Nonetheless, traders may find solace in the Pivot Point Standard. As at the time of writing, the apex coin is trading above its pivot point which makes it a bullish asset and hints at more price increases. Let’s look at the previous price performance during August.

August is not all Bullish

After the previous turmoil in the past two quarters, many would love to hear more good news. Unfortunately, August is not looking promising. Based on the recent during this period, we came to the conclusion that we may expect a steady movement from BTC.

The monthly heatmap shows that bitcoin failed to record any significant price increase or decrease during the last two eighth months of the year. If that happens this time, the apex coin may range between two important levels.

However, it is hard to reach a definite conclusion as we observed that the highest BTC gained during this period is 60% and there is notable trends to this effect. It also recorded losses of more than 34%.

Nonetheless, on average, the top coin loses 0.9%. All the highlights may leave many confused. However, when we take the previously highlighted factors into consideration, we may arrive at a conclusion.

It is easy to conclude that most indicators bearish and there may be more downtrends in the coming days. However, what are the next levels to watch as the the consistent price decrease continues?

Key Levels to Watch

Supports: $22k, $20,500, 18,900

Resistance: $24,2oo, $25,700

All of the highlighted levels are based on recent price movements. For the past seven days, the apex coin has maintained the $22k support which makes it one of the key levels to watch. However, this level is not one to bank on as intense selling pressure will see it flip.

Once that barrier breaks, we may expect further dips that may take BTC as low as $20,500. The top coin exchanged above this level since the 15th day of July. Depending on how quick the bulls are to react, the support may also flip.

The $18,900 barrier is one of the most important as we are sure that once it flips, we are sure to see more downtrend and a deeper low. Nonetheless, it would not be wise to rule out the possibility of an uptrend.

If such takes place, we may expect the bulls to push for a retest of the $24, 200. The level is one of the most important as it is almost certain that a flip may result in a retest of the $25,000 barrier.

Further attempts towards other levels may continue and we see a test of the first pivot resistance at $25,700 resistance.