BTC Price Short-Term Holders Capitulation Persists, 26% Drop On The Cards?

John Isige
September 7, 2023
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CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
btc price chart

BTC price performance in August left nothing to be desired as bears set camp in the market, prolonging a stubborn downtrend since early July. Down 11.5% in 30 days to $25,808, the largest crypto has barely formed two bullish candles since July.

Losing support at $30,000 marked a bearish turning point which was greatly underestimated by analysts and investors. In addition to putting an end to the bullish technical outlook that had propelled the price of Bitcoin to $32,000 in June, the breakdown confirmed a critical rising wedge pattern.

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BTC Price Downtrend Far From Over

The persistent downtrend in July, August, and currently September is just but a continuation of the rising wedge breakout, with a 36.63% target to $18,940. BTC price has already completed approximately 10% of the drop with 26% likely to follow.

Based on the weekly chart, the 200-week Exponential Moving Average (EMA) (purple) at $25,586 holds as the most important support, which bulls must strive to defend at all costs. Bitcoin sits below the 50-week EMA (red) and the 100-week EMA (blue) – a sign that bears have the upper hand.

btc price chart
BTC/USD weekly chart | Tradingview

The Relative Strength Index (RSI) has upheld a negative outlook since April and might have to drop to the oversold region before BTC price begins a significant trend reversal. The RSI forming a negative divergence with the price should have served as a warning to many that Bitcoin was not poised for a bull run despite the move to $32,000.

Short positions in BTC would continue on a profitable path as bulls search for stronger support. Traders may want to book profits as they go to avoid sudden bear traps of short-term price swings, which apart from liquidating positions, are not sustainable. That said, consider levels at $24,000, $22,000, and $20,000 as potential exits for shorts or entries for short-term long positions.

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Bitcoin Short-Term Holders Capitulate

Short-term holders in Bitcoin have been left with no choice but to capitulate. In other words, they are closing their positions while absorbing the losses, culminating in a 14 percentage points drop in the supply of BTC in profit – ARK Invest reported.

Bitcoin market sentiment and monthly valuation
Bitcoin market sentiment and monthly valuation | ARK Invest

Despite the negative sentiment, this period could still mark the beginning of a bull run, as opined by analyst Ben Lilly. “Bitcoin’s about to take the driver’s seat again,” Lilly said via a written statement, citing Bitcoin Dominance action in 2018 and 2019.

“We trended down for a few months (first red arrow) before getting the massive reversal on April Fools’ Day (first green arrow),” Lilly added.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
John is a seasoned crypto expert, renowned for his in-depth analysis and accurate price predictions in the digital asset market. As the Price Prediction Editor for Market Content at CoinGape Media, he is dedicated to delivering valuable insights on price trends and market forecasts. With his extensive experience in the crypto sphere, John has honed his skills in understanding on-chain data analytics, Non-Fungible Tokens (NFTs), Decentralized Finance (DeFi), Centralized Finance (CeFi), and the dynamic metaverse landscape. Through his steadfast reporting, John keeps his audience informed and equipped to navigate the ever-changing crypto market.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.