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Bitcoin’s Bull Case Degrades Following Selloff; What Analysts Are Watching

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  • Bitcoin has seen some slight downside today, marking a bearish resolution to the bout of sideways trading that it has been caught within throughout the past few days
  • Yesterday, bulls were showing some signs of strength as they pushed the crypto towards $12,000
  • This fleeting momentum seems to indicate that bulls are still plagued by underlying weakness
  • As for where BTC may trend next, analysts are noting that this did strike a blow to the bull case, opening the gates for it to reach some lower downside targets
  • It is important to keep in mind that the lower-$11,000 region is laced with significant buying pressure

Bitcoin and the entire cryptocurrency market saw a sharp downturn today that came about when BTC lost the momentum that was previously guiding it up towards $12,000.

The sharp decline sent it reeling down to its crucial high time frame support in the $9,400 region and seemed to be indicative of technical weakness.

Buyers were able to post an ardent defense of this level, but the crypto still appears to be in a precarious position.

One analyst is noting that this decline struck a blow to the cryptocurrency’s technical outlook, putting it at risk of seeing significantly further near-term downside.

Bitcoin Strength Degrades Following Failed Attempt to Break Above $12,000

Bitcoin has been caught within a strong consolidation phase throughout the past few weeks.

This has caused it to mostly range within the upper-$11,000 region, with each break above or below this range being fleeting.

At the time of writing, Bitcoin is trading down over 2% at its current price of $11,500. This is around where it has been trading throughout the past several weeks.

Bulls were able to guard against a break below $11,400 – this level has become a strong support for the crypto in recent times.

Where Bitcoin trends in the coming few hours should depend primarily on whether or not the support level it is trading above continues holding firm.

Analyst: BTC Prone to Seeing Significant Near-Term Downside 

While speaking about this latest decline’s impacts on Bitcoin’s technical outlook, one analyst explained that it did strike a blow to BTC’s bull case.

“Mapped BTC out play by play throughout this consolidation and breakdown with a few simple levels and lines. Feels like this has been an incredibly clean patch of PA to trade through. Looking for downside targets from here, not seeing any reason to be hyper bull right now.”

Image Courtesy of Cold Blooded Shiller. Chart via TradingView.

The hours and days ahead should be revealing as to just how impactful this latest decline will be on Bitcoin’s mid-term uptrend.

Featured image from Unsplash.
Charts from TradingView.





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Bitcoin outflows from centralized exchanges surge to 100K BTC monthly

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Bitcoin outflows from centralized exchanges have surged to their highest level year-to-date, with roughly 40,000 BTC being withdrawn over the past seven days.

According to the Glassnode’s August 2 The Week On-Chain report, Bitcoin outflows have accelerated to a rate exceeding 100,000 BTC per month for just the third time since September 2019. The on-chain analytics provider estimates that just 13.2% of circulating BTC are currently held on exchanges — a new low for 2021.

“This represents a near full retracement of the significant inflow volume observed during the May sell-off,” the report noted.

BTC Exchange Net Position Change – Glassnode

Outflows surged to nearly 150,000 BTC monthly at the end of April 2020 following the violent “Black Thursday” crash that saw crypto prices tumble by more than 50% in less than two days after then-U.S. President Trump announced a travel ban between Europe and the U.S. in March as the coronavirus pandemic intensified. Despite the aggressive crash, Bitcoin had rebounded by 150% by the end of May 2020, driving heavy accumulation.

Outflows again came close to 150,000 BTC monthly in November 2020 as Bitcoin surged to test its then-record price high of $20,000, with BTC rallying into new all-time highs the following month.

Glassnode notes divergent trends between Coinbase and Binance throughout most of 2021, with Coinbase having experienced significant outflows while Binance has been the largest recipient of BTC.

However, Binance’s reserves are now beginning to dwindle, with 37,500 BTC (worth roughly $1.5 billion) exiting the exchange over the past week.

Coinbase balances remained steady in June. While the exchange received 30,000 BTC in mid-July, 31,000 BTC was withdrawn from the platform this past week.

Related: Traders are withdrawing 2,000 BTC from centralized exchanges daily

Looking at the macro sentiment, the on-chain analytics provider referred to its “Liveliness metric” to identify trends in accumulation.

The metric, which measures the ratio of the sum of coin days destroyed and the sum of all coin days ever created, indicates a broad trend of accumulation following May’s immediate sell-off.

“It seems that HODLing and accumulation is the most likely dominant trend in the on-chain market,” the report concluded.

BTC Liveliness chart: Glassnode