Analysis
Bitcoin price prediction: Another move below $56K coming?
The range formation was breached conclusively on the 1st of May when Bitcoin dropped like a rock to $56.5k.
- Bitcoin has a bearish short-term outlook with its series of lower highs in the past month
- The drop to $56.5k meant the liquidity below it would likely be tested soon
Bitcoin [BTC] clung to the $60.7k support level over the weekend, but its short-term bearish expectation held weight.
A recent AMBCrypto liquidity analysis showed where a price reversal could occur for this week’s price action.
News of two dormant wallets, inactive for nearly 11 years, waking up to sell BTC worth $60.9 million could spook market participants. The report also highlighted a drop in key on-chain Bitcoin metrics.
The capital inflows for BTC showed indecisiveness
Source: BTC/USDT on TradingView
The range formation was breached conclusively on the 1st of May, when Bitcoin dropped like a rock to $56.5k. Even though it bounced to $65.5k a week later, its lower timeframe market structure was bearish.
AMBCrypto’s Bitcoin price prediction leans toward a drop to the $56k mark and potentially lower. At press time, it possessed steady downward momentum, signaled by the RSI’s reading of 47.
The price has formed lower highs since mid-April.
The 78.6% HTF Fibonacci retracement level at $55.5k might be revisited before the bottom is in. It is unclear how things would unfold, but traders and investors should be prepared for this scenario.
The spot CVD disagreed with the CMF indicator’s findings
Source: Coinalyze
Capital inflow and bullish conviction are necessary for an asset to trend upward. The Open Interest chart has been passive and lackluster over the past week as Bitcoin also struggled to form a trend.
However, the spot CVD began to climb higher, and reclaimed a former short-term support level.
Read Bitcoin’s [BTC] Price Prediction 2024-25
This indicated buying pressure in the spot markets. Additionally, the past two days saw short positions liquidated.
This forced market buy orders of the liquidated position and, if the trend continues, could see Bitcoin bounce higher.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
