Bitcoin (BTC) price bounced back during the early Asian trading hours on Aug. 10 as bulls bought the dip following Monday’s bloodbath.
Data from CoinMarketCap shows BTC rose from a low of $53,965, rising more than 6.55% to an intraday high of $56,297 on Coinbase.
This performance moved in tandem with the liquidation of more than $407 million leveraged crypto liquidations across the crypto market over the last 24 hours. At the same time, more than $180.93 million leveraged Bitcoin positions have been liquidated over the same period. Among these, $93.75 million were short BTC liquidations
This means that bears were caught off guard with Bitcoin’s sharp recovery above $56,000.
At the time of writing, BTC was trading at $55,943, uo 6% over the last 24 hours. If Bitcoin price rebounds as sharply as it dropped, it would initiate a V-shaped recovery, leading to a return to the psychological level at $70,000. This would result in a 25% ascent from the current price.
This positive outlook is supported by the position of the relative strength index (RSI) in the oversold region. The price strength at 33, up from 26 on Aug. 5 suggests that the sellers are exhausted and the buyers are getting more on the dips, which could initiate a sustained recovery.
On the downside, the RSI was moving just above the oversold line at 33, suggesting that the market conditions still favoured the downside.
As such, Bitcoin price could turn down from the current levels to continue the correction, with the first line of defense emerging from the $52,000 psychological levels. Additional lines of support lie at $50,000 and $45,000, with the last form of support being the $40,000 mark.