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Bitcoin (BTC) dipped below $28,700 following the Wall Street opening on August 7, as persistent spot selling pressured the BTC price downward.
BTC/USD 1-hour chart. Source: TradingView
Bitcoin traders prepare for potential losses as $29,000 support level falters
Data from Cointelegraph Markets Pro and TradingView indicated that BTC/USD was approaching its August lows after a volatile weekly close.
The commencement of trading in the United States provided no respite for bulls following a weekend of stagnant price movement, with traders and analysts already forecasting a downward trend once the stalemate was broken.
In response to the situation, well-known trader Daan Crypto Trades remarked that the premium of derivatives trading over spot had placed bulls in a more precarious position.
“The existence of a Perpetual pair premium compared to Spot is generally not a positive indicator. Coupled with the relentless spot selling and erratic price movements, this is not an ideal scenario. Exercise caution,” he advised his Twitter followers.
BTC/USD with perpetual futures basis chart. Source: Daan Crypto Trades/Twitter
Trading platform Decentrader cautioned that one of its proprietary trading indicators had turned bearish “across most timeframes,” while earlier, popular trader Crypto Tony mentioned that the $29,000 support was already showing signs of weakness.
“Breaking below $29k support. The gradual decline persists as individuals remain reluctant to acknowledge the market’s fragility,” the trading group IncomeSharks noted.
#Bitcoin
It appears likely to retest the green zone below and potentially break lower from that point.
We have seen two consecutive daily closes below support, indicating further downside is probable. pic.twitter.com/TzTtMTvLB2— Nebraskangooner (@Nebraskangooner) August 7, 2023
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Speculations regarding a decline ahead of the August 10 U.S. Consumer Price Index (CPI) release were already being discussed — a scenario that would represent classic BTC price behavior if it materializes.
Data from monitoring service CoinGlass reported total BTC long liquidations exceeding $10.5 million for the day. Overall cross-crypto long liquidations reached $60 million.
Can BTC price evade a double top in 2023?
Looking at weekly timeframes, popular trader and analyst Rekt Capital highlighted an intriguing scenario developing for BTC/USD.
Related: BTC price meets CPI as volatility ‘collapses’ — 5 things to know in Bitcoin this week
He noted in a YouTube update that weekly candles were nearing the completion of a double top formation, with confirmation expected within the next month.
To form the classic M-shaped pattern, however, Bitcoin would need to revisit the vicinity of $26,000 — a move that would necessitate breaking through several key moving averages.
These included the 200-week simple moving average (SMA), along with the 21-week and 50-week exponential moving averages (EMAs).
“The significance of this structure overall and this region serving as a confluence support area is due to the presence of two bullish momentum exponential moving averages developing here,” he explained regarding the area between $26,000 and the current spot price.
This support cluster, Rekt Capital added, could potentially obstruct the formation of a double top, allowing Bitcoin to establish a weekly higher low and continue its upward trajectory.
BTC/USD 1-week chart with 200SMA; 21, 50EMA. Source: TradingView
This article does not provide investment advice or recommendations. All investment and trading activities carry risk, and readers should perform their own research before making any decisions.
