With a massive correction phase in the crypto and US markets, the bears are gaining momentum. Breaking below crucial supports, the altcoins and Bitcoin are struggling in a market freefall.
As the long-side liquidations in the crypto market surged to $170 million, the US stock market lost $1.05 trillion on Tuesday. Amid such conditions, will the bulls manage to bounce back? Let’s find out.
Crucial Level For Bitcoin
In the 4-hour chart, the Bitcoin price shows a declining trend, with the 50 EMA acting as the dynamic resistance. The falling channel breaks under the $57,500 support zone but reveals a long-tail candle. Hence, the underlying demand for the BTC is visible near the $55,647 level or the 23.60% Fibonacci level.
With a bullish divergence in the RSI line, the bulls are preparing for a recovery run and to resurface above the $57,500 zone. However, the 50 EMA at the $59,0773 mark can lead to a high supply attack for a reversal.
Currently, the BTC crypto price is at $56,736, with an intraday drop of 1.31%.
Santiment reports a striking correlation between the S&P 500 and Bitcoin prices. Compared to the previous fall of 3% in the S&P 500 in August, when BTC crypto price declined 7.12%, the recent correction of 2.16% in the S&P 500 led to just a 1.82% fall in Bitcoin.
As the effect of US market correction declines over the crypto market, the chances of a recovery run increase, ignoring global market conditions.
Will the Crypto Market Bounce Back?
As Bitcoin approaches the crucial support of $55,647 or the 23.60% Fibonacci level, the reversal chances are increasing for Bitcoin. Further, with the divergence at play and the declining effect of the US market over the crypto market, the bulls are likely to spring back into action this week.
Concerned if the Bitcoin will fall under $50,000? Check out our Bitcoin (BTC) Price Prediction for the 2024 trend!
