A cryptocurrency trading expert has suggested that the ongoing Bitcoin (BTC) sell-off will likely escalate in the coming weeks, noting that the asset is facing a possible capitulation event.
In a TradingView post on August 3, analyst Alan Santana noted that this projection is based on a detailed examination of historical price movements and critical technical indicators, which forewarn investors of significant market turbulence ahead.
According to the expert, Bitcoin surged past $70,000 on July 29, 2024, but the euphoria was short-lived. The cryptocurrency couldn’t sustain this price level for even 15 minutes, swiftly falling below the mark and trading below $65,000. This rapid descent indicates overwhelming selling pressure at this price point.
In contrast, Bitcoin’s journey above $20,000 paints a different picture. After surpassing this level in mid-January 2023, Santana observed that it remained there persistently, dipping below only briefly in March 2023. This prolonged stability above $20,000 is a bullish signal, reflecting strong market confidence.
However, the scenario above $70,000 tells a different story. Bitcoin first breached this level on March 11, 2024, but could only maintain it for eight days over the subsequent months. This failure to hold above $70,000 repeatedly highlights a bearish trend, underscoring the market’s struggle to sustain higher valuations.
The repeated inability to hold above $70,000 is a harbinger of an impending market correction. Therefore, Santana’s analysis warns of an upcoming capitulation event, anticipated within the next one to two months.
“I am warning you so that you don’t have to suffer, lose money, like we did many times before in the past when we started “trading” without experience and got locked up after a major rise. The capitulation event is due next. It can happen within 1-2 months, give or take,” the expert stated.
A key component of Santana’s analysis is the Exponential Moving Average (EMA) at 144 periods (EMA144). Historically, This technical indicator has been a pivotal support and resistance level for Bitcoin. Coming from a high in 2022, Bitcoin met EMA144, which failed to hold as a support level.
After the descent, EMA144 turned into a resistance point. In 2023, Bitcoin broke through EMA144, hovering around this level for several months before decisively moving past it. As Bitcoin hit a new all-time high in March 2024, it moved far above EMA144. Now descending, EMA144 is expected to act as support again.
Santana noted that for Bitcoin to embark on a new bullish wave, the maiden crypto must retest EMA144 as a support level. This retesting phase is crucial: if EMA144 holds, Bitcoin could reverse its course and resume growth. However, if it fails, the cryptocurrency may need to seek lower support levels before any potential recovery.
Santana’s analysis highlights the critical importance of this phase, projecting a minimum price of $40,000 for Bitcoin in the coming weeks.
Bitcoin price analysis
By press time, Bitcoin was trading at $61,664, having plunged over 4% in the last 24 hours. On the weekly timeframe, BTC was down almost 10%.
Overall, Bitcoin’s short-term price movement is showing significant volatility, and dropping below the $60,000 support could lead to more losses.
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