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Why Bitcoin Struggled to Reach $65k in August 2024

Bitcoin has encountered obstacles in sustaining its momentum as it endeavored to surpass the $61,000 level. Recent data as of August 22, 2024, indicates that Bitcoin (BTC) has retraced to approximately $60,025, signifying a 2% decrease from its recent peak of $61,158.

In recent weeks, Bitcoin underwent a substantial surge, rising by 35% between August 5 and August 16, only to undergo a significant correction. Despite its efforts to reclaim the $61,000 threshold on August 21, Bitcoin encountered selling pressure at $61,227, prompting a phase of market consolidation.

Over the past week, Bitcoin’s price has fluctuated between $58,000 and $62,000, reflecting a correction of approximately 6% from its recent high. Uncertainty in the broader financial markets has also contributed to this correction, with factors such as significant Bitcoin sales by FTX creditors and the US government contributing to market volatility.

The latest data from IntoTheBlock underscores the imbalance of buy and sell orders as a critical factor influencing Bitcoin’s price action. The Exchange Market Depth chart reveals that there are more sell orders (53,000 BTC) than buy orders (47,000 BTC), creating an imbalance of approximately 6,000 BTC and an estimated $50 million in sell pressure.

This selling pressure is evident in the significant volume of orders from major exchanges like Binance, which account for a substantial portion of the total sell orders. Consequently, the market is struggling to gain the momentum required for a sustained rally, with sellers regaining control after the recent price surge.

From a technical standpoint, Bitcoin is currently encountering significant resistance at $62,000, with the middle Keltner Channel band serving as dynamic resistance. The RSI Divergence Indicator also indicates a bearish divergence, suggesting a weakening upward momentum.

Should Bitcoin fail to maintain its position above the key support level of $59,000, it could face further downside risk, with the next significant support around $54,565. Nevertheless, a successful breakthrough above the $62,000 resistance is pivotal for any bullish continuation, although the current market conditions may limit the likelihood of such a breakout.

In conclusion, while Bitcoin has demonstrated resilience in recent weeks, the market dynamics indicate that it may encounter challenges in reaching the $65,000 level in the near future. The selling pressure and technical resistance at $62,000 could constrain Bitcoin’s price, resulting in further consolidation or even a potential correction before a substantial recovery materializes.

It is imperative for traders to diligently monitor key support and resistance levels as Bitcoin navigates through this challenging phase.

Ibrahim Ajibade Ademolawa, a seasoned research analyst with a background in Commercial Banking and Web3 startups, specializing in DeFi and TradFi analysis, holds a B.A. in Economics and is pursuing an MSc in Blockchain. His insights provide valuable perspectives on the current state of the Bitcoin market.

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