All Roads Leading To Bitcoin Price Drop In Short Term?

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CoinGape
6d ago2022-08-06

Looking at certain indicators gives an indication of a potential Bitcoin price drop. Bitcoin (BTC) price hovers around the $23,000 range as high volatility shrouded the cryptocurrency in the last few days. After opening the week at well above the $24,000 mark, Bitcoin is now trading in the range of $23,000. Meanwhile, recent trading activity of short term investors signals at a possible further reduction in BTC price.

Bitcoin Price Drop Imminent In Near Future?

Due to the selling trend from short term investors, it appears that there is a possibility of a price drop. The same is reflecting in technical indicators. While Bitcoin has formed a rising wedge pattern, the outlook is however negative for the asset. According to CryptoQuant analysis, there is a negative divergence in RSI and MACD oscillators below the resistance line.

“Below the resistance line, we see a negative divergence in RSI and MACD oscillators. These can be a pre-signal of the possibility of wedge breakdown.”

Similarly, another indicator, the Spent Output Profit Ratio (SOPR) is indicating a potential price drop with a clear downward trend. “SOPR of short-term investors has reached level 1 in a downward trend.” The SOPR is calculated as a ratio of the realized value in USD and the value at creation of a spent output. A downtrend in SOPR often reflects a selling environment among investors to protect from potential losses.

Next Support Level

Meanwhile, Bitcoin (BTC) price has hardly deviated from the $23,200 level on Saturday. As of writing, Bitcoin price stands at $23,199.95, up 0.79% in the last 24 hours, according to CoinMarketCap. On a weekly basis, the top cryptocurrency took a plunge by 5.33%. There is a slow down in the upside momentum for Bitcoin price. Analysis indicated that if BTC fails to hold on to the current price range, it could fall back to a support of $22,600. If BTC manages to reach the support price, the next support could be at around $22,200.

Anvesh reports major developments around crypto adoption and price analysis. Having been associated with the industry since 2016, Anvesh is a strong advocate of decentralized technologies. Follow Anvesh on Twitter at @AnveshReddyBTC and reach him out at [email protected]
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.