Key Points
- Bitcoin has seen a significant decline in value, with predictions of further drops if the $55,355 support level fails.
- Market indicators suggest that the current Bitcoin rally is not supported by fundamentals, with declining on-chain activities and negative netflow from large holders.
Bitcoin [BTC] has been experiencing a downward trend, with a 3.64% decline in the past 24 hours. A crypto analyst has predicted a further decline if the $55,355 support level fails to hold.
Bitcoin’s Recent Decline
Despite a positive September, Bitcoin has seen a sharp decline in the last two days. As of now, it’s trading at $61,407, marking a 4.31% weekly decline.
Before this, Bitcoin was on a rising trajectory, with a 5.99% increase on monthly charts. But since reaching a high of $66,508, it has dropped to a low of $60,164.
Analyzing the Market
Crypto analyst Man of Bitcoin suggests a potential decline due to the ABC structure on Elliot’s wave -B. The analyst believes that Bitcoin has broken a micro support, which could lead to further decline.
According to this analysis, the market is bearish, leading to two potential scenarios. The first scenario is that Bitcoin will form an ABC correction where Wave-A has started, and the prices are declining. In this scenario, Bitcoin would hold its support above $55,355.
In the second scenario, Bitcoin will break below the $55,355 support level, indicating a significant decline.
Bitcoin’s Price DAA divergence has remained negative over the past week, suggesting that the current rally is not supported by fundamentals as on-chain activities have declined. This condition implies that the price growth is unsustainable as it signals a lack of confidence and fading interest.
Furthermore, MVRV’s long/short difference has declined over the past week from a high of 4.5% to 3.7%. This decline suggests that long-term holders are no longer willing to hold as much, and short-term holders might be selling to avoid losses.
Lastly, Bitcoin’s large holders’ netflow has hit negative levels since 25th September. This suggests that large holders are not opening new positions while they are closing the existing ones.
This negative market sentiment, combined with bears trying to take over the market, could lead to Bitcoin declining to $59,899. However, a reversal would see Bitcoin reclaim $62675 levels.
