As Bitcoin (BTC) attempts to hold above the $57,000 mark, a crypto analyst has warned that investors might need to brace themselves for further correction.
In a July 8 post on TradingView, analyst Alan Santana provided a detailed breakdown of Bitcoin’s current bearish trends, supported by crucial volume indicators and price movements.
Santana’s analysis focused on significant volume trends observed over the past few months. For instance, on March 5, Bitcoin experienced its highest daily volume in years, but the session closed red.
This high-volume day marked the beginning of a 111-day trend of decreasing volume, broken on June 24 with a volume breakout. That trading day saw above-average volume and closed in the red, indicating strong selling pressure.
On July 5, Bitcoin saw another high in daily trading volume, with the session once again closing red, reinforcing the bearish sentiment.
Notably, Santana raised critical questions and provided insights based on these observations. The highest volume in years on a bearish session indicated that significant selling pressure began on March 5, as a bearish close accompanied the high volume.
The break of the decreasing volume trend on June 24 with a volume spike and a bearish close suggests a continuation of selling pressure, leading to new lows.
He noted that Bitcoin is trading within a descending channel, indicating a clear bearish trend. This channel’s upper and lower bounds have acted as resistance and support, respectively.
Price levels to watch
Santana’s analysis indicates that the volume trend shows a consistent decline until the breakout on June 24, followed by another spike on July 5. The expert highlighted crucial support levels around $44,000 and resistance levels near $72,000.
Bitcoin’s price action suggests it might test the lower support levels if the bearish trend continues.
The expert noted that the bearish wave for Bitcoin continues to unravel. The volume indicators and recent price action suggest that bears have the upper hand. Selling pressure is evident, and the scarcity of buyers further strengthens the bearish outlook.
As a result, Bitcoin might be heading towards the $50,000 mark, potentially testing lower support levels around $44,000.
Bitcoin price analysis
After dropping to around $54,400 in the last 24 hours, Bitcoin has recovered, trading at $57,190 by press time. However, the daily and weekly timeframes reflect the bearish sentiment, having plunged by 0.25% and 9.5%, respectively.
Over the past seven days, Bitcoin has been on a downtrend influenced by key events. Initially priced at $62,660, Bitcoin saw a decline, hitting a low around July 6, likely due to a significant Bitcoin transaction by the German government. Despite a brief recovery, another dip followed the announcement of Mt. Gox repayments.
The price has found strong support at $56,000, rebounding multiple times from this level. Resistance at $60,000 has proven challenging to overcome and should remain on investors’ radar.
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