While the overall trend of Bitcoin (BTC) remains sideways, the daily chart shows several key support levels for a potential bounce, with the price hitting its third lowest high (LH) since March.
Bitcoin’s lower highs could mean trouble.
Previously, significant corrections of 23% and 26% were observed in April and June 2024, respectively, due to lower highs.
The retail BTC market is largely depressed, with the 7-day moving average spot volume falling 62% from $29 billion to $11 billion in just four months.
However, Bitcoin futures and perpetual open interest are near all-time highs with positive funding rates, meaning long positions are being paid by short traders.
Related: Bitcoin ‘Late Longs’ Fade Away, BTC Price Drops to $65,000
If leveraged long positions fail to defend $66,000 and open interest decreases significantly, it indicates that long positions will be liquidated, which could potentially lead to a further decline in the BTC price.
BTC price support level is $63,000
Bitcoin is currently at risk of retesting its first support zone between $64,500 and $63,000, which coincides with the 50- and 100-day exponential moving averages (50, 100-EMA, blue and purple lines).
This particular support level was previously tested during the July 25 correction, but there is also a potential liquidation event of around $1 billion (Binance). Therefore, this could be a support level that traders can defend when trying to execute orders in the liquidity range. However, a drop below $63,500 could trigger another decline.
The area between $61,400 and $62,300 is an unconfirmed daily order block. However, it has no historical significance in terms of volume, so it is unlikely that the price will bounce from here.
2.42 Million BTC Stored at $56,000 in 6M Addresses
This means that Bitcoin’s long-term support is between $60,000 and $56,000. This particular area is significant in terms of concentration. Data analytics platform Intotheblock reports that over 6 million addresses hold over 2.42 million BTC at an average price of $56,083.
This particular support range also acts as a previous lower-lower range, where BTC could potentially experience another liquidity sweep. In an extreme correction scenario, Bitcoin should ideally hold this level around $60,000, as it has historical significance.
Popular cryptocurrency analyst Captain Pivik emphasized that while Bitcoin is currently consolidating at support levels, the next area to watch is around $60,000. He told X:
The daily MA128 (65.2K) is now acting as a major support. The bulls need to defend it or else Bitcoin could fall back to the 60k support zone.
The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views or opinions of Cointelegraph.