Bitcoin Price Prediction: BTC Starts Recovery As Buyers Attempt To Break Above $50,000

Last Updated July 23rd 2021
4 Min Read

Daily Bitcoin BTC Technical Analysis
  • The MACD has reversed from bullish to bearish recently.
  • The Bitcoin price has reversed the parabolic SAR from positive to negative.

This Monday, the Bitcoin price encountered significant resistance at the $57,300 line and dropped down. While BTC has fallen below the $50.000 psychological level, let's see just how much more it will fall with technical analysis.

 

Bitcoin Price Has Found Support On The 20-day SMA

Bitcoin price found support at the 20-day SMA and has since gone up to the $50,000 level. However, despite this recovery, do note that BTC had flashed two negative signals. Firstly, the MACD has reversed from bullish to bearish, and secondly, the parabolic SAR has flipped from positive to negative.

btc/usd daily chart 022421

Image: BTC/USD daily

The 20-day SMA ($48,000) provides healthy support, as noted by IntoTheBlock’s IOMAP. Previously, at this level, 744,000 addresses had purchased 303,000 BTC tokens.

btc/usd volume chart 022421

Image: IntoTheBlock

As noted by the 4-hour Bitcoin price chart, after flashing the buy signal in the form of a red-nine candlestick, the price managed to recover.

btc/usd  4-hour chart 022421

Image: BTC/USD 4-hour

 

Prior To Bitcoin Price Plunge to $45,000 Exchange Inflows Spiked to 1,000%

After reaching an all-time high of $58,400, Bitcoin dropped by over $13,000 over one day. On-chain data suggests that exchanges saw the highest one-hour inflow spike in months shortly after the price surge. This could have driven the steep decline.

Data provided by Santiment revealed that BTC investors had initiated the largest one-hour exchange inflow spike in four months. The firm noted that this had ultimately increased the total supply returning to trading venues by 0.15% 

btc/usd santiment chart 022421

Image: Santiment 

The analytics company also pointed to the potential role of BTC whales in this major price crash. Whales are BTC hodlers with at least 1,000 coins in one wallet. The number of such addresses peaked at 2,462 last week but declined by nearly 2% to 2,416. With BTC’s surging price, it’s safe to assume that some BTC whales could have realized some profits after the recent remarkable price rally. 

Santiment also highlighted one particular whale that made an import of 2,700 tokens ($157 million) to a crypto exchange around the time when Bitcoin reached its latest ATH. On-chain data says that this is the second-largest BTC transaction in 2021 so far.

 

$6 Billion In Crypto Futures Liquidated Prior To Fall In Bitcoin Price

Bitcoin’s price recently dropped from an all-time high of nearly $57,500 to $48,000 as derivatives positions worth almost $6 billion got force liquidated by crypto exchanges. In other words, crypto exchanges liquidated traders' overleveraged positions. 

Traders typically overleverage, believing that Bitcoin's price would go up and they would benefit from it. But when the price drops below the liquidation price of their positions, exchanges force liquidate or close their positions as traders cannot fulfill their leveraged positions' margin requirements. 

According to Bybt, more than 645,000 traders were liquidated over 24 hours and the largest single liquidation order happened on Huobi for Bitcoin ($20.66 million). With respect to liquidations across exchanges, Binance had the largest share (over $2.5 billion), followed by Huobi (around $1.40 billion) and OKEx (over $745 million). Bitcoin positions formed most liquidations in terms of digital assets, followed by Ether (ETH) and XRP.

 

Bitcoin Price Is Expected To Reach These Levels

Bitcoin price will likely recover the $50,000 level and hover above this zone.

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