On July 12, the X social network was in an uproar after multiple on-chain data outlets and independent analysts reported that the German government’s Bitcoin wallet now had a zero balance. Some in the group are suggesting that the Bitcoin (BTC) price will surge now that this assumed selling pressure has been removed from the market.
Despite this news, Bitcoin price remains stuck in a tight range with $60,000 as resistance and $54,000 as support.
Let’s take a look at some of the technical factors behind recent Bitcoin price movements.
Bear flag persists and resistance at $60,000
As Bitcoin plunged from $60,000, an M-top (or double-top) was confirmed and a bear flag continuation pattern emerged. Note that the downtrend accelerates with increasing selling volume, and the breakout attempt is limited by weak buying volume.
Ideally, a trader would hope for a strong high volume above the $60,000 level, where the 61.8% Fibonacci correction level is located, to break this pattern, followed by a few daily candlesticks closing above $60,000 to establish support at or above this level.
Bitcoin order book depth and liquidation levels
In cryptocurrencies, prices tend to move in the direction of the most liquidity, and when comparing the BTC/USD volume profile to Bitcoin’s order book depth of 2%-5%, it is clear that the price ping-ponged between the bids at $54,000-$57,000 and the ask block at $60,000.
According to the liquidation map, leveraged traders have opened large long positions near $56,500, so if price breaks below that level and the current bearish flag continuation pattern continues, things could get tricky.
Related: Why did the Bitcoin price go up today?
While the expectation among market participants that Bitcoin prices will reverse course now that the German government has ended its BTC sell-off could become the new story in the crypto media, the looming threat that some of the 140,000 Bitcoins will be returned to Mt. Gox customers to sell off their recent buybacks could be the next selling pressure event that could anchor prices within the current range or even send them towards the M-top target of $44,000.
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.