Bitcoin Bounces To $58K, Why Bears Could Spill More Blood

Bitcoin is trying to recover critical support over $58,000 after one of the most violent days it has seen in 2021. A daily close north of this target could push BTC’s price back to the $60,000, but still a long way from a confirmed recovery.

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Bitcoin traded at $58,137, with some sideways movements in the daily charts.

BTC trades at $58,000 on the 4-hour chart Source: BTCUSD Tradingview

After hitting a record $69,000, Bitcoin began its downtrend immediately. After a constant battle between bears and bulls, the benchmark cryptocurrency lost support around $60,000 and found support at $55,600.

Experts claimed that the market was too leveraged and could be subject to a liquidity cascade. This happened as of May and July 2018. The price of Bitcoin dropped 17.26% since its ATH.

The general market sentiment is now down, although it’s still optimistic. According to crypto exchange platforms, funding rates have turned neutral. This suggests that traders who trade short term may be feeling shaken.

According to Coinbase, Bitcoin experienced an average of 27%, 24% and 54% corrections from its peak. dataUTXO Management. This combined with the neutral funding rate suggests BTC might see greater downside price movement.

Source: UTXO Management

Bitcoin currently has support at $55,000, with the possibility of a jump to $60,000. Some question the sustainability of the upward trend, believing that there’s still too much market leverage to prevent a new all-time high.

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Jan Wuestenfeld, On-Chain analyst saidHere are some details about BTC, the market and its current status:

So far, the drawdown of #Bitcoin’s price is comparably minimal. Both #Bitcoin’s price and that of crypto Twitter remain relatively stable. This means that the price could continue to fall before it reaches the desperation levels that will shake the last of the weak hands.

Bitcoin (BTC), On A Multiyear Bull Market

The consensus is that Bitcoin will continue to move in a bullish direction long-term. Bitcoin’s benchmark crypto has a stable foundation and is able to benefit from a favorable macroeconomic outlook.

As trust in financial institutions declines, inflation fears seem to drive more people to crypto to protect themselves from rising prices and generate income.

The U.S. currency has been strengthening in recent weeks as a result of an increase in macro risks. A prolonged rally might make Bitcoin climb to new territory more challenging.

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While the benchmark crypto appears to be poised for greater gains in Q4, but there is a chance that the market will demand another sacrifice. Mike McGlone is a senior commodity strategist at Bloomberg Intelligence and believes that BTC will receive $50,000 support while $100,000 will serve as resistance, as cryptocurrency appreciation continues to consolidate.

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