Bitcoin (BTC) analysis suggests that as long positions are “thrown out,” BTC price action is expected to target $58,000 next.
Bitcoin Weekly Losses Soar to 10%
According to data from Cointelegraph Markets Pro and TradingView, selling pressure persisted, sending BTC/USD to its lowest level in three weeks.
A gloomy weekend has led to a gloomy weekly candle close, prompting market participants to warn that Bitcoin bulls could face even more trouble next week.
“Bitcoin has entered the CME gap, but technically it can only be filled during TradFi trading hours,” Keith Alan, co-founder of trading resource Material Indicators, wrote in a recent X post on August 4.
Allen commented on the gap between the closing and opening prices of CME Group’s Bitcoin futures market.
BTC price action has tended to move up or down since the weekend to “fill” this gap, with $58,000 currently being targeted as a short-term target.
Popular trader Daan Crypto Trades continued his post on the topic with an explanatory chart, saying, “Bitcoin will open a new CME gap if it trades at its current value.”
“We will start trading around the green box. We still opened a big gap last month between $58K-$61K. We will now open a new gap between ~$60K-$63K. It will be an interesting week.”
Meanwhile, Allen predicted that the weekly close, which was expected to show BTC/USD down more than 8% at the time of writing, would not provide lasting relief.
“With that in mind, I think it’s unlikely that BTC prices will recover at the end of the week, but even if they do, I expect it to be short-lived,” he concluded.
“I expect support to be tested and gap filled next week. Bulls don’t want to see any lower lows.”
The attached chart highlights buy and sell signals from one of Material Indicators’ proprietary trading tools.
BTC Price Volatility “Guaranteed”
Adding his thoughts to the CME gap debate, popular fellow trader CrypNuevo argued that a “flush” to $58,000 would have a cleansing effect on market sentiment.
Related: Bitcoin Traders Warn of Tough Q3 as Nikkei Recalls 1987 ‘Black Monday’
“The other thing is that the range between $72,000 and $60,000 was very clear and distinct in the minds of all traders,” said part of the X thread that day.
“That means bullish traders bought at $60,000-$61,000. A plunge to $58,000 would scare them enough to get out of their positions. That may be the trick the market needs.”
Data from monitoring resource CoinGlass shows how long BTC positions have been hit in recent days.
Since August 1, nearly $200 million worth of longs have been liquidated, and BTC/USD fell below $60,000, blocking most of the buying liquidity.
“It’s a constant downtrend, but a lot of orders are starting to appear,” Daan Crypto Trades responded with order book data from the BTC/USDT pair on the world’s largest exchange, Binance.
“Long positions are rect, short positions are in, deep buyers are in. Volatility is guaranteed.”
As Cointelegraph reported, the $56,000-$60,000 range will be the key support level to support the bulls.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.