Recent Bitcoin (BTC) metrics highlight a potential local bottom at $49,500, suggesting a pivotal shift in the cryptocurrency’s market dynamics. After enduring a sharp decline, Bitcoin’s price dipped to a monthly low of $49,577 on August 5. While skepticism persists among some investors, data from CryptoQuant indicates that the worst might be behind us.
The broader market’s attention is currently drawn to the Federal Reserve’s upcoming decision on interest rates, a factor that could heavily influence Bitcoin’s price direction. Traders are keenly anticipating the announcement, hoping for a boost in market confidence. A favorable decision could serve as a catalyst, propelling Bitcoin past its resistance levels.
Nonetheless, Bitcoin must reclaim higher price levels soon to avoid further downside risk. Surpassing key resistance around $60,000 is essential for regaining bullish momentum.
Are We Seeing the End of Bitcoin’s Downtrend?
Bitcoin is currently trading just below $60,000, reflecting a recovery phase from its recent local lows. This upward movement has sparked optimism among investors who believe that the series of corrections starting in March may soon be over.
Analysts, including leading experts, suggest that Bitcoin may have hit its bottom on August 5. A prominent CryptoQuant analyst, Axel Adler, who specializes in on-chain and macro research, shared insightful data on X indicating that Bitcoin might indeed have bottomed.
The chart shared by Adler shows a significant decrease in the Mayer Multiple, dropping from 1.82 for $73,000 to 0.9 points. A decline to 0.7 points would confirm a local bottom. This indicator historically helps identify market bottoms and potential reversal points.
The prevailing mood of market fear and uncertainty seems to be shifting. On September 15, the Fear and Greed Index showed a neutral level for the first time since August 26, signaling potential stabilization in market sentiment.
As Bitcoin hovers near $60,000 and exhibits signs of recovery, the market is adjusting its outlook. This suggests that the worst corrections might be behind us and that a new growth phase could be imminent.
Key BTC Levels to Monitor
Bitcoin (BTC) is trading at $59,003, following a 5% dip from last Friday’s local high. The price faces resistance as it struggles to close above the 4-hour 200 exponential moving average (EMA) at $58,848, testing this level from below. The 200 EMA is crucial for gauging short-term market strength, and reclaiming it is vital for BTC to regain momentum.
For a bullish market structure, BTC needs to surpass the $60,000 mark—a psychological barrier that could trigger significant buying interest if breached with conviction. A strong move above this level signifies a renewed uptrend, possibly attracting more investors.
Conversely, if BTC fails to close above the 4H 200 EMA, a more profound correction might follow. The price could then target $55,500, a crucial demand level where buy orders may offer support. This level is essential for defining Bitcoin’s long-term price direction.
Featured image from Dall-E, chart from TradingView
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