- Bitcoin has fallen nearly 5% in the past week of trading, with its price dipping to US$67K.
- BTC has a strong support at $66K which is yet to be re-tested, although it may not be far away.
- Analysis from Santiment suggests the current BTC downturn may not resolve for a little while yet, as DeFi balances are yet to liquidate and buy into the dip.
- However, most experts believe it’s only a matter of time before Bitcoin breaks out of its slump.
It’s been an up-and-down past month for Bitcoin. After a pair of sharp rises where BTC re-broke the US $70K (AU $105K) barrier, the cryptocurrency has been ranging between this ceiling and its support level at US $66K (AU $100K). The past few days has seen the digital currency fall 4.65% in less than a week of trading.
So is the current downtrend anything to worry about? Or is it just a continuation of the push/pull between buyers and sellers that’s been happening since BTC broke its all-time high earlier this year?
Related: Analyst Reveals Several Reasons Why Ethereum Could Reach a $150K Valuation per ETH
Here Are Two Key Reasons Why Bitcoin Isn’t on the Rebound…Yet
According to data analytics firm Santiment, a crypto rebound might still be a few days (or weeks) of trading away.
Why?
Well, there are a couple of key metrics that the company associates with trend reversals that are absent from the current market.
First, the number of BTC buy calls (posted on social media) has actually increased following the coin’s slide in price. While typical logic suggests more buyers = more price rises, the truth can sometimes be mysterious when it comes to crypto.
Santiment believes that greater FUD and despair can be a signal for a crypto bounce, as emotionless, seasoned investors capitalise on panicked sell orders.
Similarly, a Santiment deep dive into on-chain metrics uncovered that DeFi liquidations are relatively stable. In the past, mass sales on platforms such as Aave or Compound have led to market rebounds.
So while these numbers remain steady, it suggests BTC may not be on the verge of a breakout as traders aren’t yet ready to buy into a “cheap” dip price.
There’s no need to despair though. Despite the current downtrend BTC is still up 10% over the past month – which is an excellent return by anybody’s measure.
Given its prominence in the upcoming election, it’d take a brave soul to bet against Bitcoin continuing on its upward trend in the second half of 2024.
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