Bitcoin is on the verge of a bearish collapse, with little chance of holding the $25,000 support.
On September 11, Bitcoin (BTC) broke out of the parallel range between $25,500 and $26,500, falling to an intraday low of $24,950. A daily close below $24,750 could lead to a drop to the sub-$20,000 range, but there is a slim chance that the bullish momentum could revive.
According to anonymous trader Horse, Bitcoin at $25,000 presents a short-term buying opportunity as it is the “best area to trap sellers” and “arguably the best position for the long-term backdrop” risk-reward ratio.
I feel the chances of the market reaching this level after the first major test are slim.
Seems like the best area to bait sellers and arguably the best place to do a long term contextual R:R
I’ll catch the dropped knife. pic.twitter.com/eFNMzBCPJW
— Horse (@TheFlowHorse) September 11, 2023
Price action in global markets and on-chain indicators hitting all-time lows may give buyers hope that a positive trend may flourish.
Is DXY on the way out?
Bitcoin tends to maintain a negative correlation with the U.S. dollar and a positive correlation with stocks.
On September 11, while the S&P 500 and Nasdaq stock indexes were trading higher, the U.S. Dollar Index (DXY) was declining.
The U.S. Dollar Index is hitting long-term range highs near 104.8, suggesting a possible negative reversal in prices. A bearish U.S. dollar could give Bitcoin’s price a boost.
The US Consumer Price Index (CPI) released on September 13 may provide a decisive direction for the global market.
Bitcoin Trader Can Make $26,000 in Profits
According to the latest news Report Bitcoin’s price decline over the past few weeks has caused multiple indicators to hit all-time lows, according to on-chain analytics website Glassnode.
Current market conditions are characterized by low liquidity and low trading volumes. While this complicates bulls’ ability to push Bitcoin price above multiple resistance levels, long-term holders may begin to accumulate holdings as the bullish hype cools down.
According to Glassnode:
“Realized gains and losses were similar to levels seen in the 2020 market, underscoring that the 2021 bull market exuberance may have completely faded away.”
Furthermore, Bitcoin’s negative price action since mid-August has caused the “vast majority” of short-term supply to fall into “unrealized losses,” which could serve as a potential short-term reversal level.
However, Glassnode also noted that “volatility, liquidity, trading volume, and on-chain settlement volume are all at historically low levels,” which has pushed the market toward “extreme apathy, exhaustion, and even boredom.”
Related: GBTC ‘discount’ at smallest since 2021 despite BTC price at 3-month low
Therefore, if a bullish reversal occurs, especially around the short-term buyer breakeven level around $26,000, many sellers may enter the market.
Taken together, the USD Index price action and on-chain data suggest buyers may be returning sooner than expected, making the current price action a potentially lucrative opportunity to build Bitcoin longs.
This article does not contain investment advice or recommendations. Every investment and trading activity involves risks, and readers should do their own research when making decisions.
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