The crypto market experienced a drop on Tuesday, with Bitcoin dropping below the $60K mark. As of the latest data, BTC is trading at $59,282.15 representing a 5.76% decrease over the past 24 hours. This sudden sell-off has wiped out a substantial portion of the market's recent gains.
The abrupt price movement triggered a wave of liquidations in leveraged crypto derivatives positions. Data from CoinGlass reveals that over $300 million in liquidations occurred within the last 24 hours.
While the exact cause of the sell-off remains unclear, analysts suggest it could be a combination of factors, including profit-taking after recent gains and a lack of positive news to drive the market further.
Just a few days ago, BlackRock's iShares Bitcoin Trust ETF (IBIT) recorded its largest daily net inflow in 35 days according to our previous report. On August 26, the ETF saw a $224.1 million net inflow, its highest since July 22, when it had $526.7 million in inflows. This suggests that some investors are viewing the price dip as a buying opportunity.
Bitcoin's price action is currently trading on a bullish flag pattern. For the upward momentum to continue and confirm the bullish trend, BTC needs to trade and close above the flag's resistance level which is around $68,000. A successful breakout above this level could trigger a massive rally, with analysis projecting targets as high as $100K and beyond.
The current retracement is seen as a potential opportunity to fill a large fair value gap from last week. Traders are closely watching for a recovery and continuation of the bullish trend after this gap is fully filled.
It's worth noting that Bitcoin is currently 130 days post-halving as seen from a recent tweet. Historical data suggests that on average, Bitcoin peaks 480 days after a halving event. This indicates that there may still be significant upside potential in the coming months.
On technical indicators, the 4-hour RSI chart shows that Bitcoin's RSI has entered the oversold zone. This often indicates a potential reversal point, suggesting that a bounce may be imminent.
Ali Martinez tweeted that data from Binance reveals that top traders are largely bullish, with 65.22% of them taking long positions on BTC. This indicates strong confidence in Bitcoin's potential for recovery and further gains.
Some analysts have pointed out similarities between the current price action and patterns observed during the 2020 market recovery following the COVID-19 crash. While past performance doesn't guarantee future results, this fractal comparison has caught the attention of many traders.
The $60,000 level is now acting as a key psychological resistance. A strong close above this level could restore bullish sentiment in the short term.