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BTC experienced a bearish move over the weekend dropping below the critical $60K with the it now trading at $58,456.21, a 4.61% decline over the past 24 hours. The broader crypto market also experienced this downtrend, signaling a potential shift in market sentiment. The market cap currently stands at $1.15 trillion while the 24-hour trading volume has surged by 90.86% to $27.99 billion indicating boosted trading activity amid the market volatility.
The drop below the $60K psychological mark is linked to a reduction in institutional stablecoin inflows as shown on an X post from on-chain platform Lookonchain. This decrease in stablecoin transactions suggests that institutions might be pausing their crypto buying activity potentially contributing to the lack of buying pressure and reduced investor appetite for Bitcoin.
Notably, approximately $1.3 billion USDT was transferred from Tether Treasury to exchanges following the market's downturn on Aug 5 but this trend seems to have paused since yesterday.
From a technical perspective, Bitcoin's recent price action reveals a complex yet crucial pattern. After dropping to $49,000 on Aug. 5 due to recession fears and disappointing Non-Farm Payroll (NFP) data BTC has since then displayed a bullish recovery, climbing to $62,700 before retreating to its current level. The initial drop to $49,000 filled a significant fair value gap and found support within a critical demand zone setting the stage for subsequent bullish momentum.
Bitcoin's price is currently trading within a bullish flag pattern that has been in formation since early March. This pattern typically signals a continuation of the bullish trend. The key level to watch is the flag's resistance around $68,000. A break and close above this level could push BTC toward the much-anticipated $100,000 mark possibly before the year ends.
However in the near term, Bitcoin might revisit the $55K level to fill a lower timeframe fair value gap before attempting to break and close above the flag's resistance.
Technical indicators offer further insights into Bitcoin's potential price movements. The daily RSI is currently at 42 rebounding from an oversold level of 26 recorded on Aug 5th. This suggests that bullish momentum is building despite the recent price decline.
Moreover, Bitcoin remains below its 50, 100 and 200-day moving averages which typically suggests a bearish trend. However, a successful breakout above the bullish flag's resistance could signal a trend reversal validating the continuation of the bullish trend.
Also, the Long/Short Ratio chart further shows the bearish movement. This is because there has been an increase in short positions over the past few days as reported by Coinglass.
