The cryptocurrency market has experienced a significant decline, with values dropping by 4.82% within the past 24 hours, resulting in the market capitalization falling below $2 trillion. Currently, Bitcoin (BTC) trades beneath the $57,000 threshold, which marks a critical downturn leading to what is known as a ‘death cross’ event on the total market capitalization chart, specifically between the 50 and 200-day exponential moving averages (EMAs).

As the market grapples with further instability, the next support level is projected at approximately $1.87 trillion. A minor bullish divergence noted in the daily Relative Strength Index (RSI) may indicate a potential rebound. The Bitcoin price suffered a decline of 2.77% overnight and is presently down by 1.73% from its opening price of $57,506.

Analyzing the performance of Bitcoin, we observe that it has experienced a decrease of 10.82% over the past week, following a prior recovery of 10%. The formation of a bearish engulfing candle foreshadows continuing downtrend this week, with Bitcoin falling further by 1.42%. The 4-hour chart illustrates a consistent decline in support trends and recent price rejections below the significant Fibonacci level of 23.60%, currently situated at $55,650.

At present, Bitcoin’s value stands at $56,503, with critical support at approximately $55,852 undergoing evaluation amid lower price rejections. The breach beneath the $57,000 mark challenges the essential demand zone, while a falling channel pattern is evident, with the 50-EMA on the 4-hour chart functioning as dynamic resistance. Notably, the 4-hour RSI indicates a minor bullish divergence as it hovers precariously near the oversold boundary.

Another noteworthy factor contributing to Bitcoin’s price decline is the substantial outflow of Bitcoin ETFs. On September 3rd, Bitcoin ETF flows witnessed an exceptional influx of outflows amounting to $287.8 million. Major contributors to this event include Fidelity with an outflow of $162.3 million, followed by GBTC at $50.4 million, Ark at $33.6 million, and Bitwise at $25 million. In contrast, Blackrock’s IBIT and Wtree’s BTCW recorded no net changes during this bear market.

Analyzing sentiment and derivatives, the current Fear and Greed Index indicates heightened market anxiety at a level of 27, underscoring a prevailing atmosphere of fear among investors. Furthermore, Bitcoin’s dominance has slipped by 0.14% while the derivatives market reflects a reduction in Open Interest to $51.46 billion, representing a 4.26% drop within 24 hours. Liquidations in the market have surged by 160%, equating to a $195 million loss. These bearish signals in the derivatives sector coupled with the declining sentiment suggest strong selling pressures. However, recovery signals, indicated by the long/short ratio of top traders on Binance and OKX exchanges, hint at underlying optimism.

Looking ahead, a pertinent question arises: Will the Bitcoin price plummet to $50,000? Escalating supply and declining market sentiments suggest a likely continuation of bearish trends. Should the 23.60% Fibonacci level break down, subsequent support levels can be expected at $54,000 and $51,335. Conversely, in the event of a slight recovery, Bitcoin might reattempt to breach the previously broken $57,000 zone, aiming for the $59,000 mark. Individuals keen to explore the future trajectories of Bitcoin’s price into the year 2024 may seek further insights from established analyses and predictions.

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