Bitcoin Price Prediction: Why BTC May Crash $54,000

Highlights

Bitcoin price delicately holds $58,000 support after the US CPI report.
The CME BTC futures open interest slides 5% to $8.36 billion, hinting at intense headwinds ahead.
The IOMAP model brings into light, robust resistance at $64,000 with a 944.51k BTC volume.
Reclaiming the 200-day EMA support/resistance will help affirm the bullish grip and lead to recovery above $60,000.

Bitcoin (BTC) price prediction showed a continued correction following the release of US Consumer Price Index (CPI) data on Wednesday. A 4% retreat put the largest cryptocurrency at $58,730 ahead of the American session. Altcoin majors Ethereum (ETH), Solana (SOL), and Ripple (XRP) dropped 4%, 3.1%, and 1.6%, respectively, underscoring headwinds in the market.

Bitcoin May Slide To $54,000 As OI Plunges

Bitcoin price rallied above $61,000 and edged closer to $62,000 resistance before the release of the CPI data. According to the Bureau of Labour Statistics (BLS), inflation cooled to 2.9% annually, with the Core CPI steadying at 3.2%.

Based on this data, economists expect the Federal Reserve to cut interest rates by at least 25 basis points in September, a move that could ease pressure on risk assets like Bitcoin.

However, the optimism for a rate cut did not prevent BTC price from sell-side pressure, as a drop below $60,000 momentarily followed the report. The Bitcoin price prediction hindsight revealed that the CPI report is often associated with intense volatility, implying another drop to $54,000 could be brewing before giving way to a bigger leg up.

The CME BTC futures open interest (OI) data on Coinglass highlighted a 5% decline to $8.36 billion, signaling a potential price drop. Traders lack market reversal conviction with only a few willing to keep positions open. A previous BTC price forecast found that the largest digital asset tends to drop with reducing CME futures OI.

Bitcoin price holds above a crucial IntoTheBlock IOMAP model support between $54,955 and $56,695. About 874.5k addresses purchased 585.78k BTC in this range, making up the demand that could advance BTC toward $70,000.

However, the most important region runs between $63,728 and $65,468, where 1.61 million addresses bought 944.51k BTC.

A breach of this region is required to invalidate the bearish thesis, giving bulls free rein to cultivate the next rally to ATH and higher. Bitcoin price prediction shows that BTC risk stalling between $58,000 and $64,000 if this supply zone holds.

Bitcoin Price Prediction: Downside Risks Hold BTC Back

Bitcoin price quickly reclaimed $58,000 support but struggled to sustain the uptrend, which was eyeing $60,000. The RSI retreat in the neutral region targets the oversold area below 30, which may escalate the forecasted decline to $54,000.

Bitcoin price prediction chart | Tradingview — Bitcoin price chart | Tradingview

Based on the daily chart, short-term support at $57,000 will determine whether Bitcoin price renews the uptrend immediately above $60,000 or drops to $54,000 first before reversing the trend. Nevertheless, if bulls manage to reclaim the 200-day EMA resistance at $59,454 as support, downside risks may shrink drastically, boosting the chances of a reversal above $60,00.

Frequently Asked Questions (FAQs)

1. Where is BTC price headed as OI drops?

A persistent drop in OI implies a lack of market conviction, increasing the probability of an extended correction.

2. Is Bitcoin going to drop to $54,000?

The short-term technical outlook is bearish, with the IOMAP revealing strong resistance at $64,000. A drop to $54,000 will become apparent, especially if support at $58,000 breaks.

3. Will Bitcoin see ATH again in 2024?

If most bullish factors like support at $58,000 holds and resistance at $64,000 breaks, Bitcoin will have a higher probability of reaching ATH before year end.

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John Isige

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.

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