Bitcoin (BTC) Starts the Week with a Reversal Zone in Sight, Risks a Further Correction

Bitcoin (BTC) has started the week on a down note, trading within the $58,000 range after briefly surpassing $60,000.

Bitcoin (BTC) began the week trading within the $58,000 range after briefly surpassing $60,000. Analysts anticipate further correction for Bitcoin, with strong support around $54,000.

Bitcoin encountered a resistance zone after rising above $59,000 last week. This zone, identified by QCP Capital, could influence price movement and potentially lead to a drop below $58,000. However, analysts remain optimistic, expecting Bitcoin to find support around the $54,000 level.

“After a drop below $58,000, BTC is likely to find strong support around the $54,000 level. This coincides with the 200-day moving average (MA), which has acted as a floor during previous downtrends,” QCP Capital stated.

Bitcoin Faces Historical Challenges in September

A further analysis by QCP highlights Bitcoin’s historical trend of a -4.5% return in September, suggesting a potential retracement to around $55,000. This aligns with historical performance data, which shows that the coin has consistently underperformed during September, with an average return of -4.78% since 2013.

Moreover, the third quarter (Q3) has generally been challenging for Bitcoin and the broader crypto market. This has led to caution among investors, as evident in the poor performance of Bitcoin ETFs, such as BlackRock’s iShares Bitcoin Trust (IBIT).

According to a recent CryptoQuant report, there has been less stablecoin inflow into exchanges, indicating that investors believe the downtrend may continue.

“Investors are pulling their funds out of crypto exchanges at a faster rate than they are depositing, suggesting that they remain pessimistic about the immediate market trend,” the report states.

However, Daan Crypto Trades, a popular trader, points to the potential for a short-term pullback due to a new CME Gap near $59,000 and last week’s gap.

“A new CME Gap was made this weekend sitting at ~$59,000. Last week’s gap is also still partially open but the price did close most of it during that move to $61,000,” the trader wrote.

A CME gap occurs when Bitcoin’s price on the Chicago Mercantile Exchange (CME) differs between the market’s close and its reopening after a weekend or holiday. These gaps are often filled as the price tends to return to the gap’s level.

Amidst the current market volatility, Bitcoin whales are also making adjustments to their portfolios. For instance, one whale withdrew 1,100 BTC from Binance, while another whale bought 1,000 BTC, increasing their holdings.

Avinash Shekhar, Co-founder of Pi42, anticipates further fluctuations, especially with upcoming US economic events. He adds that a strong September employment report could lead to further market volatility.

“A strong September US employment report could temper expectations for easier monetary policy, potentially leading to further market volatility. However, there’s also a 50% chance of an upward trend,” Shekhar told BeInCrypto.

As of now, Bitcoin is trading at $58,391, down 0.31% in the last 24 hours.