The price of Bitcoin after reaching a record peak has continued to decline and is currently in a low liquidity zone, causing increasing selling pressure.
The price of Bitcoin has fallen below a key support level in the supply zone from 110,000 to 116,000 USD, with short-term investor profits significantly declining, undermining market confidence.
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The price of Bitcoin has dropped from a peak of 123,000 USD to around 112,000 USD, falling into a low liquidity zone.
Short-term investor profits have decreased to about 70%, and the lack of buying pressure has increased selling pressure.
A decrease in funding rates reflects weak demand for leverage; prices could drop to 110,000 USD if resistance at 116,900 USD is not surpassed.
How has the price of Bitcoin fluctuated since its record peak?
The price of Bitcoin has undergone a correction phase after reaching an all-time high of 123,000 USD in mid-July. As of now, the price has dropped to 112,000 USD, falling below the support level of the supply zone from 116,000 USD, entering a "gap zone" with low liquidity.
Falling into this zone often makes prices prone to abnormal fluctuations due to a lack of stable buying and selling. This decline represents a normal correction in a bullish market but also warns of increasing selling pressure.
Why is short-term investor profit important during this period?
Short-term investors holding Bitcoin currently see profits reduced to around 70%, indicating that most investors are either at a loss or only making small profits. This reduces holding motivation, creating a higher likelihood of selling.
In the absence of new cash flow and strong demand, market confidence weakens, leading to increased selling pressure and hindering price recovery in the short term. Although there have been buying spikes pushing prices above 114,000 USD, weak liquidity still makes the price range of 110,000 – 116,000 USD prone to fluctuations.
What does the decrease in funding rates indicate about Bitcoin market trends?
A sharp decrease in funding rates across major perpetual contract markets indicates that demand for leveraged borrowing in Bitcoin trading is weakening. This signals that investors are losing interest in opening leveraged long positions, reducing decisiveness regarding upward trends.
Failure to surpass the strong resistance level of 116,900 USD could lead to a deeper decline, with price targets aimed at 110,000 USD. However, the current price is still higher than the average cost for short-term investors (106,000 USD), consistent with a normal correction in a bullish market.
The price of Bitcoin may need more time to establish a stable support zone, while investors should closely monitor key resistance levels in the short term.
Cryptocurrency market analyst, August 2024
Frequently Asked Questions
Does the price of Bitcoin dropping below 116,000 USD affect the market?
Prices below 116,000 USD indicate that the current supply zone is quite thin, which could cause strong volatility due to a lack of sustainable buying pressure, creating significant selling pressure if not supported in time.
Why has the profit of short-term investors decreased to around 70%?
Decreasing profits reflect that many investors who bought near the price peak or during the bullish phase have suffered losses or low profits, making them prone to panic selling.
Does a decrease in funding rates mean that the Bitcoin market is weakening?
A decrease in funding rates signals reduced demand for leveraged positions, indicating that the market is cautious or lacks strong upward momentum, which could lead to a downtrend or sideways movement.
Is the price level of 110,000 USD an important support zone?
110,000 USD is a technical support level; falling below this level may trigger stronger selling pressure and push prices down further.
Can the price of Bitcoin recover quickly?
Currently, strong buying power and the return of long-term investors are needed to support prices; this process may take time and heavily depends on global market developments.
Source: https://tintucbitcoin.com/hodlers-bitcoin-lo-khang-cu-manh-116-900-usd/
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