Bitcoin stands at the edge of a bearish breakdown, with a small possibility that the $25,000 support level could hold.
On Sept. 11, Bitcoin (BTC) broke from its parallel range between $25,500 and $26,500, falling to an intraday low at $24,950. A daily close below $24,750 threatens a drop to the sub-$20,000 range, but there’s a slight chance that the bullish momentum could revive.
According to pseudonymous trader Horse, Bitcoin at $25,000 presents a short-term buying opportunity as it’s the “best area to trap sellers” and “arguably the best place for long contextual” risk to reward ratio.
I feel like the chances that the market smokes this level after the first major test is slim.
Seems like the best area to trap sellers, and arguably the best place for long contextual R:R
I’ll catch a falling knife. pic.twitter.com/eFNMzBCPJW
— HORSE (@TheFlowHorse) September 11, 2023
The price action in global markets and on-chain indicators tapping historical lows could give buyers hope that a positive trend could thrive.
Is DXY tapping out?
Bitcoin tends to maintain a negative correlation with the U.S. dollar and a positive correlation with stocks.
On Sept. 11, when the S&P 500 and Nasdaq stock market indices were trading higher, the US dollar index was falling.
The dollar index (DXY) against other global reserve currencies is tapping its long-term range high levels around 104.8 points, hinting at the possibility of a negative price reversal. A bearish dollar could add tailwinds to Bitcoin’s price.
The U.S. Consumer Price Inflation (CPI) print on Sept. 13 will likely provide a decisive direction to the global markets.
Bitcoin traders could secure profits at $26,000
According to the latest report by on-chain analytics outlet Glassnode, the Bitcon’s price drop over the last few weeks has caused several metrics to tap historical lows.
The current market conditions are characterized by low liquidity and low trading volumes. While this complicates bulls’ ability to push BTC price through multiple resistance levels, long-term holders could start to accumulate as bullish hype cools down.
According to Glassnode:
“Realized Profit and Loss are similarly at levels equivalent to the 2020 market, highlighting what is arguably a complete and total wash-out of the exuberance from the 2021 bull market.”
Moreover, Bitcoin’s negative price action since mid-August has seen a “vast majority” of short-term supply plunge…