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- Bitcoin (BTC) experienced a significant price decline in the past 24 hours, dropping to approximately $60k, but there is potential for a complete recovery following this pullback.
Bitcoin [BTC] underwent a price adjustment in the last 24 hours. A primary factor contributing to this could be the increase in liquidations.
Nevertheless, BTC was nearing a vital support level from which it could initiate a trend reversal in the upcoming days or weeks.
Reasons for Bitcoin’s Decline
Data from Coinstats indicated that BTC had fallen by over 3% in the last 24 hours. At the time of this report, BTC was trading at $60,862.71, with a market capitalization exceeding $1.2 trillion.
BTC Price Chart | Source: Coinstats
Ali, a well-known crypto analyst, recently tweeted a potential explanation for this downward trend. According to the tweet, BTC’s liquidations surged sharply around the $61,490 level.
There’s a $23 million liquidation pool at $61,490 that #Bitcoin $BTC might target before rebounding! pic.twitter.com/CeUqibBz6J
— Ali (@ali_charts) July 2, 2024
When liquidations increase, it heightens the likelihood of a price correction. Consequently, investors may have opted to exit their positions after reaching that threshold.
This recent price drop has brought BTC closer to a significant support level.
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Bitcoinworld’s examination of the coin’s daily chart indicated a widening, descending wedge pattern. Should the decline persist, investors might see BTC fall to $60,078.
At that juncture, BTC could have an opportunity to recover. If this occurs, the leading cryptocurrency’s price might gain bullish momentum and potentially reach $71k in the following weeks or months.
Is a BTC Rebound Imminent?
Bitcoinworld then intended to analyze the on-chain data of the leading coin to determine if it was poised for a rebound. Our review of Glassnode’s data uncovered a bullish indicator.
Importantly, BTC’s Pi Cycle Top indicators suggested that BTC’s price was trading below its potential market bottom. If this is accurate, BTC could turn bullish soon.
For those unfamiliar, the Pi Cycle indicator consists of the 111-day moving average (111SMA) and a 2-times multiple of the 350-day moving average (350 SMA x 2) of Bitcoin’s price.
Moreover, according to CryptoQuant’s data, BTC’s net deposits on exchanges were lower compared to the average of the past seven days. This clearly indicated that selling pressure on BTC was minimal, which typically leads to price increases.
BTC’s Binary CDD was also in the positive, indicating that long-term holders’ movements in the last week were below average. They appear motivated to retain their coins.
Conditions in the derivatives market also appeared favorable, as BTC’s Funding Rate was on the rise.
The Chaikin Money Flow (CMF) also noted a slight increase, suggesting that the likelihood of a price rise was elevated.
However, the Relative Strength Index (RSI) was supportive of the bears, as it sharply declined at the time of this report.
