Key takeaways:
Bitcoin targets $122,000, the place $2 billion briefly liquidations are clustered however Q3 seasonal knowledge hints at draw back.
A falling RSI, spot BTC ETF outflows, and low buying and selling volumes level to weakening bullish momentum.
FOMC minutes and constructive information from the White Home might set off a rally on Wednesday.
Bitcoin (BTC) briefly dipped under $117,000 on Tuesday, sweeping the inner liquidity constructed between $117,000 and $119,000 over the weekend. This liquidity absorption, typically a precursor to directional strikes, occurred as $100 million in lengthy positions had been liquidated. Regardless of the dip, the 100-day exponential transferring common (EMA) on the four-hour chart continues to supply dynamic help, limiting draw back danger within the brief time period.
With minimal buy-side liquidity seen till $114,500, the trail of least resistance now stays larger. The following key space of curiosity lies between $120,000–$122,000, an space of sell-side liquidity the place cease orders are clustered. A every day provide zone between $121,400 and $123,200, representing earlier value resistance, provides to this confluence, suggesting BTC might try to brush the exterior liquidity established over the previous two weeks.
Reinforcing this bias, BTC liquidation map knowledge reveals that $2 billion in BTC brief positions could possibly be liquidated round $121,600.
Associated: Bitcoin value gained 50% the final time its volatility fell this low
Can Bitcoin overcome $122,000?
Whereas short-term market construction outlines a bullish restoration, the long-term setup signifies that BTC’s bullish momentum could possibly be fading. A double high formation might emerge close to its all-time excessive, reflecting purchaser fatigue. Failure to interrupt cleanly above the $123,200 every day provide zone would validate this bearish sample, stalling value discovery.
Onchain knowledge helps this warning. Bitcoin’s every day relative energy index dropped sharply to 51.7 from 74.4, indicating exhaustion on the spot market, whereas every day volumes fell to $8.6 billion, each indicators of fading participation. Spot BTC exchange-traded fund (ETF) flows additionally declined 80% week-over-week to $496 million from $2.5 billion, pointing to cooling institutional urge for food.
Whereas futures open curiosity stays elevated at $45.6 billion, rising long-side funding suggests rising overconfidence. Moreover, 96.9% of provide stays in revenue, signaling excessive potential for profit-taking.
August historic returns additional reinforce this stance. With over 60% of the August interval closing within the purple with a mean return of two.56%, the upcoming month presents seasonal headwinds. Mixed with weakening onchain exercise, corresponding to falling lively addresses and switch volumes, BTC might retrace within the coming weeks.
Nevertheless, this outlook could possibly be invalidated on Wednesday. The US White Home is predicted to launch a strategic crypto coverage report, which can introduce a Bitcoin Reserve Framework and delta-neutral accumulation methods, doubtlessly boosting spot ETF flows and BTC treasury constructing.
Moreover, all eyes stay on this week’s Federal Open Market Committee (FOMC) assembly. Whereas no fee lower is predicted, such an end result could possibly be largely priced in, given July’s constant impartial tone. But, any dovish commentary from Fed Chair Jerome Powell might shift sentiment. If Powell hints at a possible fee lower in September, markets might front-run the expectation, driving BTC to interrupt above $123,000 and push to new highs.
Associated: Bitcoin analysts say this should occur for BTC value to hit new highs
This text doesn’t comprise funding recommendation or suggestions. Each funding and buying and selling transfer entails danger, and readers ought to conduct their very own analysis when making a choice.
