Bitcoin, Japan’s Central Bank announced an increase in the interest rate from 0% to 0.25%, causing Bitcoin to fall below $50,000. This decision directly affected the US stock market as investors borrowed Japanese Yen at low-interest rates to purchase assets in the US market. This paradigm shift directly impacted risk assets as Bitcoin experienced further corrections.
What is Happening on the Bitcoin Front?
Bitcoin witnessed a third lower high (LH3) on July 29, briefly touching $70,000. This specific pattern signaled a strong downward trend each time in 2024, and Bitcoin has since fallen by 25% from LH3. Previously observed lower highs in April and June 2024 led to significant corrections of 23% and 26%, respectively.
Bitcoin’s sudden crash caught everyone off guard. The BTC/USD pair failed to maintain previous support levels at $60,000 and $57,000, eventually falling below $50,000. As Bitcoin’s market structure formed a new lower-low pattern, CryptoQuant contributor Axel Adler Jr. explained that Bitcoin’s price fell below the medium-risk lower limit of 9% of active investors’ average purchase price for the fifth time, targeting $48,000 as a support level.
Additionally, Capriole Fund founder Charles Edwards believes Bitcoin should start pulling back at its current range of around $52,000. However, if Bitcoin cannot hold above $50,000, its next significant support is around $44,000. The low $40,000 levels served as a consolidation range from December 2023 to February 2024.
Bitcoin Chart Analysis
While popular advocates suggest Bitcoin should rise at $48,000 or $44,000, Intotheblock data shows that major investors’ buying levels are even lower.
Currently, approximately 6.39 million addresses hold 2.38 million Bitcoin at an average price of $42,446. Retesting $42,446 would mean an additional 18% correction from the current market value. This could certainly lead to more panic and significantly affect buyer confidence.
From a technical perspective, a bid range between $44,000 and $48,000 seems logical because a weekly order block formation exists in this range, combined with two other indicators. Therefore, the chance of Bitcoin price retesting the weekly 100-exponential moving average in this range is high, and the 0.5 Fibonacci line is at the same level of $44,672.
