Fear is running through the crypto market as the $BTC price continues to fall. Large $BTC transfers from the U.S. government and Mt.Gox wallets are causing consternation. Bitcoin is on the brink once again at $58,000. Is another crash lower about to take place?
Large-scale selling about to happen?
According to Arkham Intel, 10,000 $BTC, originating from the notorious Silk Road operation, and belonging to the U.S. Government, were sent to a Coinbase Prime deposit wallet on Wednesday. This could all potentially be sold, as it wasn’t sent to a Coinbase custody wallet.
On top of this, a further transfer of almost 34,000 $BTC was sent to a Bitgo exchange wallet on Tuesday, ready for distribution to Mt. Gox creditors. This is part of the 46,000 $BTC that is still awaiting distribution by the Mt. Gox trustees.
Although none of this aforementioned $BTC has been sold yet, the anticipation of it being sold is certainly affecting market sentiment adversely.
$58,000 is a huge support level
Source: TradingView
The daily chart shows how the $BTC price is currently hovering at the very important $58,000 support. If the alpha currency loses this support, a drop into the low $50,000s could take place.
Another serious concern is the 200 day moving average (red line). During a bull market this would normally be a very important line to stay above, and as it stands, the $BTC price has broken down through it during the Japan crash, and has only succeeded in retesting it as resistance in the last failed rally.
Short-term bounce likely
Source: TradingView
Nevertheless, with all this said, if a bounce is going to take place, this is a very likely price level for it to happen. Both the 4-hour and the 8-hour stochastic RSIs (momentum indicator) are at the bottom, and the 12-hour is on its way down. Some sort of bounce from here is presumably going to happen, and $61,000 could be a reasonable target to expect.
Summer doldrums about to end
The end of the Summer is approaching, and this is typically when asset prices in both traditional and crypto markets start to shake off their lethargy. Going into the end of the year is where things should get very exciting for the bulls. Is this guaranteed to happen? No, but if Bitcoin can survive these next few weeks, who knows where it could get to by the end of the year.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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