- Bitcoin’s price has dropped below $57,000, contributing to a broader crypto market decline and triggering a death cross signal.
- While bearish sentiment dominates, a minor recovery could see BTC retest the $57,000 level.
The cryptocurrency market is currently experiencing a downturn, with a sharp drop in Bitcoin (BTC) prices leading the charge. In the past 24 hours, the entire market has seen a 4.82% decrease, pushing the total market cap below the $2 trillion mark. The BTC price has fallen below $57,000, a critical psychological level, raising concerns among traders and investors.
A Death Cross in the Making
The recent decline in the BTC price has contributed to a death cross event in the crypto market’s total market cap chart, where the 50-day Exponential Moving Average (EMA) crosses below the 200-day EMA. This bearish signal often precedes further downward movement, leading to heightened market anxiety. The next significant support level is at $1.87 trillion, with the daily Relative Strength Index (RSI) showing a minor bullish divergence that suggests a potential bounce back.
Last night, Bitcoin’s price dropped by 2.77%, and it is currently down 1.73% from its opening price of $57,506. Over the last week, BTC has lost 10.82%, erasing gains from the previous week. With a bearish engulfing candle pattern forming, the downtrend is expected to continue.
Technical Analysis: BTC Price Struggles
On the 4-hour chart, BTC’s price action reveals a declining support trendline and lower price rejection in the recent 4-hour candle. The price is currently supported by the 23.60% Fibonacci level at $55,650. As of now, BTC is trading at $56,503, with the support level of $55,852 being tested. However, the breach of the $57,000 level undermines a crucial demand zone, and a falling channel pattern is evident, with the 50-EMA acting as dynamic resistance.
The 4-hour RSI line shows a minor bullish divergence as it hovers around the oversold boundary, suggesting that a potential recovery could be on the horizon.
Bitcoin ETFs and Market Sentiments
On September 3rd, Bitcoin ETFs experienced a significant outflow surge, contributing to the price crash. Fidelity, GBTC, Ark, and Bitwise were the major contributors, with outflows totaling $287.8 million. Amid this bearish market, Blackrock’s IBIT and Wtree’s BTCW managed to maintain a net zero flow.
The Fear and Greed Index currently sits at 27, indicating that fear is dominating the market. Additionally, BTC dominance has dropped by 0.14%. The derivatives market reflects this sentiment, with Bitcoin Open Interest down to $51.46 billion—a 4.26% drop in 24 hours. Liquidations have increased by 160%, leading to a $195 million wipeout.
Will BTC Price Hit $50K?
The bearish sentiment in the market is strong, and with increasing supply and deteriorating market conditions, a further drop to $54,000 or even $51,335 could be on the cards. However, if a recovery occurs, BTC could retest the $57,000 level and potentially push toward $59,000.
As the year progresses, investors remain uncertain about BTC’s year-end performance. To better understand what lies ahead for Bitcoin in 2024, check out our comprehensive Bitcoin (BTC) Price Prediction.
