Bitcoin temporarily surpassed $40,000 before falling below again as investor sentiment shifted to mildly negative.
Bitcoin Tanks Below $40k…Again
After climbing to $42,000 over the weekend, it appears like Bitcoin is losing pace once more. As of press time, the world’s largest cryptocurrency was down 3%! Bitcoin is currently selling at $38,591 with a market capitalization of $724 billion.
Investors are frustrated by Bitcoin’s recent price volatility, which has shown dramatic oscillations without confirming any particular trend. Algo-traders and options What investors should do from now on, according to Altcoin Psycho.
According to Bitcoin’s technical charts, if it manages to break out over $41,000 and hold it for a long time, it will move to $49,000 levels. On the downside, if Bitcoin crashes under $36,000 levels, the next support levels will be at $29,000.
If we reclaim the range high at 41k, long and close at 49k. If we lose 36k, short to 29k.
We just have to wait for one of the triggers pic.twitter.com/e1Dx9RR6Gp
— Altcoin Psycho (@AltcoinPsycho) August 2, 2021
From here on out, things aren’t going to be easy for Bitcoin investors. Bitcoin’s social and audience attitude is still slightly pessimistic. Bitcoin sentiment remains somewhat unfavorable, based on the Bitcoin social volume and ratio of good vs. negative remarks, because crypto investors/traders are quite active on the social media channel Twitter.
BTC sentiment remains in the negative. Source: Santiment
Related article | On-Chain Expert Predicts $162K Bitcoin Peak This Cycle
On-chain Observations For Bitcoin
The Adjusted SOPR (aSOPR) indicator demonstrates that the bulk of on-chain spending has lost money during the May sell-off. As resistance, the aSOPR value of 1 was used. Last week, however, the SOPR surged significantly higher, owing to significant profit realization on the Bitcoin blockchain.
The market has ceased realising profits (holding conviction remains) and absorbed the sell pressure, according to Glassnode, with aSOPR recovering higher.
According to another well-known researcher, Joseph Young, Bitcoin (BTC) is currently trading at levels last seen in February 2021. The open interest in the futures market, on the other hand, is quite low. As a result, Young describes it as a “far healthier spot-driven rehabilitation” and thus remains optimistic. He wrote on Twitter:
Bitcoin is where it was in February 2021. Yet, the futures market open interest is significantly lower. This is a much healthier spot-driven recovery.
Bitcoin is where it was in February 2021.
Yet, the futures market open interest is significantly lower.
This is a much healthier spot-driven recovery.
— Joseph Young (@iamjosephyoung) August 2, 2021
However, analyst have cautioned traders against basing their upside projections on prior market increases. For example, Bitcoin’s climb from $66 to $1,150 in 2013 does not imply that it will rise from $29,000 to $256,000 in 2021.
Given how volatile Bitcoin has been over the previous three years, forecasting future price movements has proven challenging. If you’re betting on Bitcoin’s long-term future, any price level between $30,000 and $40,000 could be a decent place to start accumulating.
BTC/USD nosedives below $40k. Source: TradingView
Related article | Bitcoin Remains At Risk, Why BTC Could Nosedive Below $38K
Featured Image from pixabay, Charts from TradingView, Glassdoor, and Santiment.