Bitcoin Faces Bearish Reversal After Reclaiming $61k Amid Increased Selling Pressure

• Bitcoin [BTC] recently reached the $61k mark, followed by a swift price correction.
• Increased selling pressure has become evident within the last 24 hours, affecting BTC’s price dynamics.
• Prominent analysts had already anticipated this price correction, flagging sell signals beforehand.

BTC hits $61k then corrects: A closer look at the recent market dynamics.

Bitcoin Experiences Bearish Shift Despite Breaking $61K

Bitcoin, often referred to as the king of cryptocurrencies, surged past the $61k milestone on August 20th. However, this bullish momentum was short-lived as the market quickly shifted, with bears overtaking the scene. According to CoinMarketCap, BTC’s price saw a decline of over 2.5% within just 24 hours. As of the latest update, BTC is trading at $59,378.99, bringing its market capitalization to over $1.17 trillion.

Analyzing the Factors Behind the Downtrend

Despite the sudden price correction, several indicators had already hinted at this downturn. A notable crypto analyst, Ali, tweeted about BTC’s TD sequential flashing a sell signal, which was shortly followed by the observed price correction. COINOTAG’s analysis via CryptoQuant highlighted that the rising BTC exchange reserves pointed towards increased selling pressure. Further supporting this were the increased exchange netflows, suggesting that more investors were offloading their BTC holdings. Additionally, higher net deposits on exchanges, compared to the 7-day average, underscored the dominant selling pressure.

Evaluating Future Market Trends

Exploring insights from Glassnode, we noted a significant drop in Bitcoin’s NVT ratio, which typically signals that the asset might be undervalued and could hint at a potential price increase. The NVT ratio, determined by dividing the market cap by the on-chain transaction volume, suggested this undervaluation. However, data from the derivatives market painted a less optimistic picture for buyers. BTC’s taker buy/sell ratio turned negative, indicating that the selling sentiment prevailed in the futures market. In terms of technical indicators, the MACD on BTC’s daily chart displayed a bullish crossover, while BTC’s RSI was nearing the neutral mark, presenting a slight bullish signal. Conversely, the Chaikin Money Flow (CMF) showed bearish tendencies as it saw a downtick.

Conclusion

In summary, while BTC’s recent touch on the $61k level demonstrated a brief bullish phase, the subsequent correction highlights the inherent volatility in the cryptocurrency market. With mixed signals from various technical indicators and ongoing selling pressure, it’s crucial for investors to remain vigilant and informed about market developments. Future market movements will likely depend on a blend of these indicators’ signals and broader market sentiments.