Bitcoin’s price has experienced a significant decline in the past few days, failing to sustain levels above $70K. Currently, the market is approaching a crucial support level, indicating a potential shift in the trend.
Looking at the daily timeframe, it is evident that the BTC price has been in a downtrend since June, following a rejection from the $72K zone. The price is now nearing the critical $60K support level, with the 200-day moving average at around $58K. A break below $60K could result in a retest of the moving average, determining the market’s mid-term trajectory.
On the 4-hour chart, a large falling wedge pattern has broken to the downside, pushing the price towards the $60K support zone. The Relative Strength Index (RSI) has also plunged below 30%, signaling oversold conditions on the 4-hour timeframe. A short-term rebound or consolidation is likely at the $60K level, but a further breakdown could target the $58K support zone.
Despite the recent price drop, many investors are witnessing a decrease in unrealized profits. Some have decided to cash out and exit the market to avoid losses. The Bitcoin Short-Term Holder SOPR reflects the profit and loss ratio, with values above one indicating profitable sales and values below one suggesting losses.
The STH SOPR is declining along with the BTC price, indicating that short-term holders are on the brink of realizing losses if the market falls below $60K. However, such occurrences are common during lows in a bull market. Therefore, if the bull market is still intact, the market may be near a potential bottom.
Bitcoin’s recent price drop has raised concerns among investors, with technical indicators pointing towards a crucial support level at $60K. The market sentiment is shifting as some investors secure profits while others brace for potential losses. The future trajectory of Bitcoin will largely depend on how the market reacts to the key support levels in the coming days.
