Bitcoin is down 1.82% day-on-day exchanging hands at $56,555 at press time. On Tuesday, the US stock markets lost over $1.05 trillion, recording one of the worst days in recent history after the August 4 crash. Nasdaq and S&P 500 indices shrunk 3.26% and 2.12% respectively.
With a strong bearish momentum gripping the markets, on Wednesday, Bitcoin made a low of 55.69k losing immediate support at $57k. It marked the lowest for Bitcoin since August 4, when BTC prices had dropped drastically below the $50k mark in the aftermath of the US market crash.
However, there are a few positives which indicate buyers are active and Bitcoin is not as bearish as it may seem.
Take for example, this interesting observation shared by Santiment. When compared to the US market crash on Aug 4, Bitcoin’s losses are not nearly as dramatic. Yesterday, when the S&P 500 shed 2.12%, Bitcoin lost only 1.12%. It is interesting to note that the leading cryptocurrency has not reciprocated the US stock market fall as passionately as it had done previously.
Why Bitcoin Can Still Recover This Week
Bitcoin experienced a dip to $55.6K after losing support at $57K on the daily charts. It quickly rebounded, attempting to reclaim the $57K level, which now acts as a resistance point. This suggests strong support at the $56K level, as buyers stepped in to prevent further declines.
Previously, on August 4, Bitcoin had dropped by 8% in a single day, falling below $50K before regaining support at $53K. Despite immense selling pressure on Tuesday, Bitcoin has displayed resilience, especially as U.S. markets tumbled.
For a strong recovery, Bitcoin needs to break above the 50 EMA at $59K, which serves as significant resistance. If this happens, BTC may aim to reclaim the $63K mark, where it was trading a week ago. The $57K level remains key for intraday trading; regaining support here could signal renewed buying activity and a potential price rebound.
This week, we may get to see heightened volatility with performance depending on the global market’s response to Tuesday’s selloff. The upcoming US Employment data could also impact the overall market sentiment. It is scheduled to be released on Friday.
