Fade

Bitcoin

when

Drops

Time

<p>Bitcoin is under immense selling pressure at spot rates, crashing below critical multi-month support at around the $53,500 to $56,000 zone. As bears take over, there are concerns that the coin could, after all, slip even lower, plunging towards the $50,000 and even $40,000 level in a bear trend continuation formation.</p> 
<h2 id="bitcoin-sellers-testing-resolve-of-determined-active-investors">Bitcoin Sellers Testing Resolve Of Determined Active Investors</h2> 
<p>Despite the prevailing doubts, several on-chain indicators point to strength. Notably, one analyst <a class="editor-rtfLink" href="https://x.com/AxelAdlerJr/status/1820327980964389200" target="_blank" rel="noopener nofollow">observed</a> that Bitcoin prices have dipped below the “moderate risk lower boundary of 9% from the average purchase price of active investors” for the fifth time in eighteen months. </p> 
<img loading="lazy" decoding="async" class="size-full wp-image-633254" src="https://www.newsbtc.com/wp-content/uploads/2024/08/GUMaphvXoAAjFLX.jpg?resize=1024%2C576" alt="Active BTC investors have support at $48,000 | Source: @AxelAdlerJr via X" width="1024" height="576" srcset="https://www.newsbtc.com/wp-content/uploads/2024/08/GUMaphvXoAAjFLX.jpg?resize=1024%2C576?w=2048 2048w, https://www.newsbtc.com/wp-content/uploads/2024/08/GUMaphvXoAAjFLX.jpg?resize=1024%2C576?w=460 460w, https://www.newsbtc.com/wp-content/uploads/2024/08/GUMaphvXoAAjFLX.jpg?resize=1024%2C576?w=768 768w, https://www.newsbtc.com/wp-content/uploads/2024/08/GUMaphvXoAAjFLX.jpg?resize=1024%2C576?w=860 860w, https://www.newsbtc.com/wp-content/uploads/2024/08/GUMaphvXoAAjFLX.jpg?resize=1024%2C576?w=1536 1536w, https://www.newsbtc.com/wp-content/uploads/2024/08/GUMaphvXoAAjFLX.jpg?resize=1024%2C576?w=750 750w, https://www.newsbtc.com/wp-content/uploads/2024/08/GUMaphvXoAAjFLX.jpg?resize=1024%2C576?w=1140 1140w" sizes="(max-width: 1000px) 100vw, 1000px" data-recalc-dims="1"> 
<p>If history guides, prices are likely to bounce from spot rates, peeling back sharp losses posted over the weekend and into early Monday, August 5. </p> 
<p>Looking at price data, the average purchase price for these active investors (or addresses that bought BTC within the last 155 days) currently stands at $48,000. </p> 
<p>Earlier today, August 5, when prices crashed, BTC tumbled to as low as $49,000 before bouncing higher. Therefore, even with the drop, most active investors are not yet in full panic mode. Challenges will emerge once the $48,000 level is breached, testing the resolve of these investors.</p> <a href="https://www.tradingview.com/x/2e0GSuy1/" rel="nofollow"><img loading="lazy" decoding="async" class="size-full" src="https://www.tradingview.com/x/2e0GSuy1/" alt="Bitcoin price trending downward on the daily chart | Source: BTCUSDT on Binance, TradingView" width="1233" height="590"></a> 
<p>For now, looking at how intense the dump was and the accompanying trading volume, it is clear that bulls are not out of the woods yet. Should BTC fall again in the coming session, breaching $50,000 and $48,000, weak hands might choose to exit, fueling the sell-off.</p> 
<h2 id="btc-in-a-bearish-formation-after-drop-time-to-take-a-contrarian-approach-and-buy">BTC In A Bearish Formation After Drop: Time To Take A Contrarian Approach And Buy?</h2> 
<p>Technically, Bitcoin is now within a bearish breakout formation after the close below the consolidation. With July gains sharply reversed, losses spilling over throughout this week are highly likely. From this outlook, Bitcoin may slip to $40,000 in a bear trend continuation formation.</p> 
<img loading="lazy" decoding="async" class="size-full wp-image-633253" src="https://www.newsbtc.com/wp-content/uploads/2024/08/GUNA4g2WAAAPRGx.jpg?resize=1024%2C475" alt="Bitcoin MVRV ratio at November 2022 level | Source: @ali_charts via X" width="1024" height="475" srcset="https://www.newsbtc.com/wp-content/uploads/2024/08/GUNA4g2WAAAPRGx.jpg?resize=1024%2C475?w=2844 2844w, https://www.newsbtc.com/wp-content/uploads/2024/08/GUNA4g2WAAAPRGx.jpg?resize=1024%2C475?w=460 460w, https://www.newsbtc.com/wp-content/uploads/2024/08/GUNA4g2WAAAPRGx.jpg?resize=1024%2C475?w=768 768w, https://www.newsbtc.com/wp-content/uploads/2024/08/GUNA4g2WAAAPRGx.jpg?resize=1024%2C475?w=860 860w, https://www.newsbtc.com/wp-content/uploads/2024/08/GUNA4g2WAAAPRGx.jpg?resize=1024%2C475?w=1536 1536w, https://www.newsbtc.com/wp-content/uploads/2024/08/GUNA4g2WAAAPRGx.jpg?resize=1024%2C475?w=2048 2048w, https://www.newsbtc.com/wp-content/uploads/2024/08/GUNA4g2WAAAPRGx.jpg?resize=1024%2C475?w=750 750w, https://www.newsbtc.com/wp-content/uploads/2024/08/GUNA4g2WAAAPRGx.jpg?resize=1024%2C475?w=1140 1140w" sizes="(max-width: 1000px) 100vw, 1000px" data-recalc-dims="1"> 
<p>Currently, from price active, one analyst also <a class="editor-rtfLink" href="https://x.com/ali_charts/status/1820370575711199321" target="_blank" rel="noopener nofollow">noted</a> that the Bitcoin market value to realized value (MVRV) ratio is at levels last seen when <a href="https://www.newsbtc.com/news/solana/solana-flying-bulls-post-ftx-collapse-losses-reversed/" target="_blank" rel="noopener ">FTX collapsed</a> in November 2022. The MVRV ratio gauges whether the coin is available for a discount or not. </p> 
<p>Though the coin briefly tanked to as low as $15,800, the recovery afterwards anchored the bull run of 2023 through to early 2024. Accordingly, if the August 5 events mirror the panic selling of late Q4 2022, Bitcoin could be available for a discount.</p>

Bitcoin Drops Hard: Time To Fade The Trend And Buy BTC?

Table of Contents

NewsBTC

Other articles published on Aug 6, 2024

Nexa Tokenomics: A Model for Exponential Growth

After Crashing 17%, 'Bitcoin Development Company' MicroStrategy Is Rising In Premarket Today: Her...

What is eCash Coin?

Japanese firm Metaplanet to invest $58.76M in Bitcoin

Central Banks Impact Bitcoin’s Value

SEC, Coinbase clash over ‘broad’ subpoena requests in ongoing legal battle

Join our free newsletter for daily crypto updates!