While the overall trend remains sideways for Bitcoin (BTC), the daily chart has illustrated its third lower high (LH) since March, presenting several key support levels for a potential rebound.
Bitcoin's lower highs could spell trouble
Previously, the lower highs observed in April and June 2024 led to significant corrections of 23% and 26%, respectively.
The retail BTC market is largely on the sidelines as the 7-day daily moving average for spot volumes has dropped from $29 billion to $11 billion, or 62%, in four months.
However, Bitcoin futures and perpetual open interest are near all-time highs with a positive funding rate, i.e. long positions are paying short traders.
Related: Bitcoin ‘late longs’ washed out as BTC price falls to $65K
If leveraged longs can’t defend $66,000 and open interest drops significantly, it indicates an exit of long positions, potentially causing BTC prices to fall further.
BTC price support level at $63K
Bitcoin is now at risk of retesting its first support zone between $64,500 and $63,000, which coincides with the 50 and 100-day exponential moving averages (50, 100-EMA, blue and purple lines).
Although this particular support level was previously tested during its correction on July 25, there is also a potential liquidation event of around $1 billion (Binance). Hence, this can be a support level that can be defended as traders try to execute their orders in a liquidity range. However, a drop below $63,500 could trigger another leg down.
The area between $61,400 and $62,300 is an untested daily order block. It doesn’t have historical significance in terms of volume, however, so it’s unlikely the price would rebound here.
6M addresses hold 2.42M BTC from $56K
This brings us to Bitcoin’s long-term support between $60,000 and $56,000. This particular zone is important in terms of concentration. Intotheblock, a data analytics platform, indicated that over 6 million addresses hold over 2.42 million BTC at an average price of $56,083.
This particular support range also acts as a previous lower-low range, where BTC can potentially experience another liquidity sweep. In an extreme correction scenario, Bitcoin should ideally hold this level at around $60,000, as it has historical significance.
Captain Faibik, a popular crypto analyst, also emphasized that while Bitcoin is currently consolidating at support, the next area to watch will be around $60,000 . He noted on X,
Daily MA128 (65.2K) is now acting as Key Support. Bulls need to defend it, otherwise, Bitcoin might revisit the 60k Support area.
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