Bitcoin (BTC) fell $2,300 in the first hour of trading on Wall Street on August 2, reaching $62,368 on Coinbase. The Bitcoin price was virtually flat, up 1% over the past 24 hours, trading at $63,252.
The sell-off caused the price to lose key support levels, the 50-day exponential moving average (EMA) at $64,300 and the 100-day EMA at $63,670.
“I just experienced the #Bitcoin sweep I’ve been waiting for and the range has recovered nicely,” Bitcoin analyst AlphaBTC declared in an August 2 post to X.
The analyst noted Bitcoin’s price action since July 30, when it bounced off a high of $66,996 and hit a swing low of just below $63,000 on August 2.
AlphaBTC said that the price needs to maintain a lower range at $63,300 to increase the chances of retesting the high of $67,000.
“It would be really bad to lose $63,000 now!”
Fellow analyst Crypto Rover shared similar sentiments, saying market participants would be in a bad situation “if Bitcoin loses support at $63,000.”
In a previous X post, AlphaBTC laid out two scenarios. The first is a bullish case where Bitcoin confirms a triple bottom structure at the “38.2 Fibonacci level” at $63,450. This would see the pioneering cryptocurrency begin a V-shaped recovery towards $66,800.
The second is a downtrend where the support at $63,000 is broken and the price quickly falls to $61,000.
“If we lose that level and don’t recover quickly, we could see lows below 61k again.”
Based on the current price action, AlphaBTC has set a short-term bearish target for Bitcoin at $61,000.
Other analysts believe that the Bitcoin price could undergo a larger correction, with downside targets set between $58,000 and $55,000.
“The current situation for Bitcoin is technically bearish and I expect it to drop below $58,000,” independent trader Emperor Keo Xplus wrote in an August 2 post on X.
Crypto Patel, an anonymous analyst, lowered his price target, saying $63,000 is a key level for the bulls.
“If #Bitcoin falls below that, the price could fall below $55,000.”
The 200-day EMA provides the last line of defense for Bitcoin price.
According to data from Cointelegraph Markets Pro and TradingView, Bitcoin’s price action has formed a series of higher lows on the daily chart, staying above the uptrend line. Bitcoin bulls need to keep the price above this level to avoid further losses.
On the daily chart, the appearance of a long lower wick on the August 1 candlestick indicated that the $65,000 level was important to buyers.
However, if the bulls lose that support, there is a possibility of a pullback towards the 200-day EMA, which appears to be the last line of defense for BTC, which is trading at $59,558.
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Popular analyst Caleb Frazen also agreed with this outlook, saying that the 200-day EMA has become a major barrier to Bitcoin’s downtrend.
“If you think #Bitcoin will remain in a bullish environment, there is a good chance that the price will bounce from this level to make a new high.”
The In/Out of the Money Around Price (IOMAP) model from IntoTheBlock also highlights the importance of this level for Bitcoin, which is just below the $60,755-$62,640 price range, where approximately 499,470 BTC was previously bought by approximately 1.54 million addresses.
This suggests that the high demand-side liquidity from this investor group could lead to the BTC price breaking through the resistance levels provided by the 100-day and 50-day EMAs at $63,663 and $64,268 respectively, which could end the sell-off and start a price recovery.
According to renowned analyst Moustache, if this happens, it could be the last time the BTC price drops below $63,000.
Moustache explained that the BTC price is forming an inverse head and shoulders pattern on the 15-minute chart, which suggests a reversal in the uptrend.
The inverse head and shoulders pattern forms a reversal setup, which includes an “inverted” head and shoulders with the left and right shoulders inverted below the neckline.
If this pattern continues, Bitcoin price could see a significant rally towards the next major price level of $65,000, before potentially retesting the range high of $65,300.
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.