Since last Friday, Bitcoin has seen a 4% pullback, after a strong 15% rally from its local lows. Despite this recent momentum, the market is facing uncertainty and volatility as BTC trades below the crucial $60,000 level, a psychological mark that indicates direction.
Investors are watching closely to see if Bitcoin can regain strength and break above this key resistance or continue to struggle in the near term.
There are signs of recovery, however, as Coinbase data shows BTC is once again trading at a price premium, indicating strong demand. Additionally, key data from Coinglass highlights critical liquidity levels that BTC could target in the coming weeks.
These factors suggest that Bitcoin is now at a crucial juncture, and its movement over the next few days will likely determine the market’s direction in the months ahead. Traders and investors are preparing for Bitcoin’s next big move.
Bitcoin Consolidation May Be Over: $70,000 Next?
The past few weeks have buoyed Bitcoin, sparking hope and optimism among investors as they prepare for a deeper correction. Recent data points to a positive shift in market sentiment.
Analyst Daan noted on X that BTC is trading at a premium on Coinbase, a sign of renewed demand from US investors and potential ETF interest. This premium is typically bullish, reflecting increased buying activity and confidence in BTC’s future.
However, deep discounts on exchanges, often seen at market lows, can signal bearish sentiment, although they also offer potential entry points for savvy investors.
In addition, Coinglass provided key indicators on Bitcoin liquidity levels. The Binance BTC/USDT liquidation heatmap shows that BTC recently absorbed a large pool of liquidity below $50,000 during the August 5 selloff. This move broke through substantial support levels, leaving fewer large pools nearby.
Key liquidity levels now sit around $47,000 and below, with substantial interest rising above $70,000.
This information suggests that while Bitcoin faces potential support and resistance challenges, current market momentum indicates a more bullish outlook.
The lack of significant liquidity clusters around the current price and the premium seen on Coinbase could indicate a continued upward trajectory, provided BTC can maintain its recent gains and build momentum.
BTC Technical Analysis: Key Levels to Watch
Bitcoin is trading at $58,593, reflecting a 4% decline from last week’s peak of $60,670. The cryptocurrency is struggling to hold its position above the 4-hour exponential moving average (EMA) at $58,883, a crucial level it reclaimed last Friday, signaling near-term strength.
This EMA has acted as important resistance since early August and could act as new support if BTC can hold above it.
To strengthen the bullish outlook, Bitcoin must recover and stay above the 200-4-hour exponential moving average and the $60,000 mark, as these levels are crucial in shaping the overall market sentiment. Failure to close above the 200-4-hour exponential moving average could lead to testing the next demand level around $57,500, which represents a healthier support zone.
If the correction continues further, BTC is likely to drop to $55,500. This deeper correction would test lower support levels and could signal more challenging market conditions ahead. Holding above these key levels will be critical in determining Bitcoin’s short-term direction and overall market stability.
Featured image of Dall-E, chart by TradingView
