Bitcoin (BTC) Price Faces Prolonged Downturn After Failing to Hold $60,000
Bitcoin’s (BTC) price is poised for an extended decline after failing to break above the crucial $60,000 resistance level. The inability to maintain this key level has raised concerns among investors, who are now closely monitoring how far the downturn might extend.
As of now, Bitcoin is currently trading at $57,862, marking a 6.85% drop over the past week. While some investors may be hopeful for a recovery, on-chain analysis suggests that another price decrease could be on the horizon.
One noteworthy on-chain indicator that supports the potential for further decline is Bitcoin’s Puell Multiple. This metric compares the daily issuance of coins to the yearly average, providing insights into whether the price is nearing a local top or bottom.
A high Puell Multiple indicates the price is close to a local top, while low values suggest proximity to a bottom. According to CryptoQuant, Bitcoin’s Puell Multiple stood at 0.65 on September 1, but it has now risen to 0.77. This increase suggests that Bitcoin may have hit a local top, indicating the possibility of a further decline in price.
Additionally, the In/Out of Money Around Price (IOMAP) indicator also supports the likelihood of a continued price decline for Bitcoin. The IOMAP analyzes addresses based on whether they are in profit, at a loss, or at the breakeven point at the current price.
If a larger number of addresses acquired Bitcoin at a price lower than the current price, it indicates strong support. Conversely, if more addresses bought BTC at a higher value, it implies significant resistance.
Data from IntoTheBlock reveals that the number of addresses that purchased Bitcoin between $58,073 and $66,773 exceeds those who bought between $49,300 and $56,200. This suggests that Bitcoin might face strong resistance at higher prices, and if buying pressure does not increase, the next potential price level for BTC could be around $54,520.
From a technical perspective, Bitcoin’s 4-hour chart reveals the formation of a descending triangle, a bearish pattern that often indicates the continuation of a downtrend. Bitcoin had previously formed an ascending triangle, hinting at a potential upswing, but this bullish scenario was invalidated when the price plunged from $62,000.
Given the current conditions, Bitcoin may struggle to recover, as previously discussed. If the downtrend persists, BTC could experience a further drop of approximately 7%, reaching around $54,677. However, if buying pressure intensifies or significant players in the crypto industry start accumulating more BTC, the price could rally to $60,990. Nonetheless, if the current trend persists, the decline could extend even further.