Bitcoin (BTC) is showing signs of potential reversal after recently hitting the lower band of its descending channel. According to Sjuul from AltCryptoGems, the crypto reached a critical support level after a dip last Friday, sparking interest among traders.
The current price of Bitcoin, as reported by CoinGecko, stands at $54,935.30 with a slight 0.98% increase in the last day, despite being down 4.94% over the past week.
Bitcoin Trades at Crucial Support Level
The analysis shared by Sjuul on X emphasizes the importance of Bitcoin’s current trading range. He noted that the digital asset has approached the lower band of a descending channel.
$BTC / $USDT – TA OTD Once again, everyone turned bearish at support and the lower band of the descending channel, while we prepared ourselves and bought the dip.But is the downtrend over, and will we go up from here? Or is there still more pain on the horizon?Follow me… pic.twitter.com/OsTp6z65SD
— Sjuul | AltCryptoGems (@AltCryptoGems) September 8, 2024
Moreover, this has also coincided with a key support level that Bitcoin has respected for the past six months. The analyst suggested this dip presented a buying opportunity, but with caution, as the market remains in a downtrend.
Sjuul pointed out that the $50-52K range was identified earlier as a critical support area. This zone has now been tagged, and while optimism remains, the suggestion is to move stop losses to break even.
“We should be bullish at support levels and bearish at resistance,” he emphasized, urging traders to protect their positions in a volatile market.
Downtrend Continues but Reversal May Be Possible
Despite the bearish sentiment, Sjuul highlighted that Bitcoin is now trading in a potential reversal zone. The fact that the price wicked exactly on the lower band of the descending channel adds further interest in this level.
However, he cautioned that Bitcoin remains in a downtrend on most time frames, and there are still challenges ahead before any sustained upward movement can be confirmed.
The analysis also pointed out several key resistance levels that must be overcome. These include the one-hour trend, which recently acted as resistance. It is also a former support level that could now function as a barrier to the upside.
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Liquidity Clusters and Market Sentiment
According to Sjuul, Bitcoin’s liquidation heatmap shows several layers of liquidity above the current price. These liquidity clusters may attract the price upward, but they also represent hurdles that must be cleared before any substantial rally can take place.
He advises traders to remain cautious as market sentiment is still in the fear zone, though it has improved slightly. While short-term volatility continues to affect Bitcoin’s price, AltCryptoGems suggests that long-term investors could see these dips as opportunities to accumulate.
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