Bitcoin traders are bracing for a potential downturn as the cryptocurrency’s price fell to $62,000. This drop has sparked discussions about whether a generational bottom is approaching. The price of Bitcoin (BTC) fell by $2,300 within an hour after the Wall Street opening on August 2, hitting $62,368 on Coinbase. The cryptocurrency has seen minimal change, rising by 1% over the last 24 hours, trading at $63,252.
This sell-off has caused Bitcoin to lose several key support levels, including the 50-day exponential moving average (EMA) at $64,300 and the 100-day EMA at $63,670. “We got the Bitcoin sweep I was waiting for and a nice reclaim of the range,” said Bitcoin analyst AlphaBTC in an August 2 post on X. The analyst was referring to Bitcoin’s price behavior since July 30, when it fell from highs of $66,996 to a swing low just below $63,000 on August 2. AlphaBTC mentioned that the price needed to hold the range low at $63,300 to increase the chances of retesting the range high at $67,000. “Losing 63k now would be really bad!”
Another analyst, Crypto Rover, echoed these sentiments, stating that market participants would be in a difficult situation “if Bitcoin loses the $63k support.” In an earlier post, AlphaBTC presented two scenarios. The first scenario is bullish, where Bitcoin would confirm a triple bottom structure around the 38.2 Fib level at $63,450, leading to a V-shaped recovery toward $66,800. The second scenario is bearish, involving a breakdown of the support at $63,000, which could swiftly push the price down to $61,000. “Lose the level and fail to reclaim it quickly, and we could see low 61ks once again.”
With the current price action, AlphaBTC set the short-term bearish target for Bitcoin at $61,000. Other analysts believe that Bitcoin’s price could see deeper corrections, with downward targets ranging between $58,000 and $55,000. Independent trader Emperor Keo Xplus wrote on August 2 that Bitcoin’s current condition is technically bearish and could decline to $58,000 or below.
Pseudonymous analyst Crypto Patel set an even lower target, emphasizing that $63,000 was a critical level for the bulls. “If Bitcoin drops below it, the price could fall to under $55,000.” Data from Cointelegraph Markets Pro and TradingView shows that Bitcoin’s price action has formed a series of higher lows on the daily chart, staying above the ascending trendline. Bitcoin bulls need to hold the price above this level to avoid further losses. The appearance of a long lower wick on the August 1 candlestick on the daily chart implied the importance of the $65,000 level for buyers.
However, if bulls lose the said support, they may retreat toward the 200-day EMA, which appears to be the last line of defense for BTC at $59,558. Popular analyst Caleb Frazen agreed with this outlook, stating that the 200-day EMA was a significant barrier for Bitcoin on its way down. “If you think that Bitcoin is going to stay in a bull market environment, then this is the level at which price is likely to rebound and make new highs.”
Data from IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model also reinforces the importance of this level for Bitcoin. It sits just below the $60,755–$62,640 price range, where approximately 499,470 BTC were previously bought by about 1.54 million addresses. This suggests that high demand-side liquidity from this cohort of investors could push BTC’s price past the resistance provided by the 100- and 50-day EMAs at $63,663 and $64,268, respectively, ending the sell-off to initiate a price recovery.
If this happens, according to popular analyst Moustache, BTC’s price below $63,000 could be the last time we see it. Moustache explained that the BTC price was nurturing an inverse head-and-shoulders pattern on the 15-minute chart, suggesting a trend reversal to the upside. The inverse head-and-shoulders pattern forms a reversal setup and includes an “inverted” head and shoulders, with the left and right shoulders upside down below the neckline. If the pattern continues, Bitcoin’s price could embark on a massive upward breakout toward its next key price level of $65,000 before potentially retesting the range high of $65,300.
It’s crucial to note that this article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The current market conditions have left Bitcoin traders in a state of anticipation. With key support levels being tested, the coming days will be critical in determining whether Bitcoin can hold its ground or if deeper corrections are on the horizon.
As the cryptocurrency market evolves, traders and analysts alike are keeping a close eye on Bitcoin’s movements. The potential for a generational bottom is a topic of much speculation, and the actions taken in the coming days could have lasting implications for the market. Whether the bulls can regain control or the bears will push the price further down remains to be seen, but one thing is clear: the world of Bitcoin trading is never short of excitement and uncertainty.
