At the beginning of August, a wave of Bitcoin liquidations wiped out hundreds of millions. Traders liquidated over $280 million in long positions on the first day of August, CoinGlass data shows. At press time, Bitcoin had fallen to $60,420, as per CoinGecko.
Sellers clearly have the balance of power now. The current climate may be challenging for many, but that’s no cause for panic. A change in market sentiment could lead to a quick market shift, relieving pressure and stabilizing the price.
The recent volatility may be a natural correction after an extended bull run. Alternatively, market uncertainty might prevail.
A Bitcoin price uptrend could follow
Though significant, the $280 million in Bitcoin liquidations is only a fraction of the total crypto market cap, which exceeds $1 trillion. In 2021, sharp fluctuations in the price have led to recovery and a new all-time high for the flagship crypto. An analyst noted that the current price movement indicates a typical five-wave uptrend. An ABC correction with an overarching wave B will follow.
An ABC correction is part of the Elliott Wave Theory. This pattern shows a three-wave correction and could reveal a future trend. According to the analyst, Wave B ended around the $69,885 mark. This is a historical resistance level. Bitcoin’s price might struggle to break this level, and the $66,745 level could also be a resistance level for the biggest digital asset.
The analyst identified the 1.618 Fibonacci extension level as a potential support area. This critical level coincides with other important support levels, including the Value Area Low (VAL) and the 0.5 Fibonacci retracement level.
Watch for a buying level between $61,800 and $62,300
The $61,800-$62,300 support area is a crucial buying level to watch out for. Bitcoin’s possible uptrend remains intact on the higher timeframe. A further decline to $56,800 is possible as Bitcoin has dropped below $61,800.
Bitcoin could break out in September
Another crypto analyst predicted on X that Bitcoin could reach a new ATH in September or October. This is possible if it holds above $60,000. We’ll have to wait and see.
