Healthy Dip or Trend Reversal? Here’s What Bitcoin Will do Next

Bitcoin sees a slight recovery after a significant retracement on Monday. The bulls are yet to stage a buyback, resulting in prices lingering close to the day’s low.

The apex coin opened the session at $115,275 but retraced, dipping to a low of $11,986. The 4-hour chart indicates that the bulk of the correction happened in the session starting at 4:00 UTC, as it plummeted from $114,707 to its current low.

Away from the price, a sweep across X shows that the latest retracement was surprising to many. They are raising questions about why BTC dipped and whether it is a pullback or a market maker’s trap. However, there are no reports of any whales selling, unlike those seen in recent times. As a result, the question about the trigger of the decline hangs.

Nonetheless, the Kobeissi Letter suggests that the most recent dip is something the market frequently sees. It noted that “as we frequently see during the Sunday night session, low liquidity has led to a large washout.” The market watcher attributes the dip to low liquidity. Nonetheless, the account noted that the investors lost over $1 billion longing Bitcoin.

Data from the Coinglass provides a different report. Liquidation across the entire crypto market over the last 12 hours totaled $1.6 billion, and traders recorded the second-largest rekt capital on BTC. They lost over $274 million going long. 

In either case, liquidations happened, and the apex coin is yet to see a buyback. 

Healthy Dip or Trend Reversal?

A look at the 1-day chart shows that the latest retracement is Bitcoin’s largest this September. This may raise concerns about whether a further downward trend will follow. 

A previous analysis noted that the apex coin faced a massive sell wall at $117k and stated the low likelihood of a breakout above $118k. It added that BTC is gearing up for further corrections, and the price is expected to plummet. Trading actions over the last four days saw this prediction play out. The asset failed to surpass the sell wall, and the coin has lost almost 5%. 

It is worth noting that the largest cryptocurrency posted an over 8% increase between September 1 and September 18. The latest retracement follows several blaring warnings from indicators. For example, the previously mentioned article noted that the moving average convergence divergence printed sell signals as the 12 EMA momentum slowed down, and the histogram printed small candles.

Based on the charts, this is a healthy dip. A review of previous trend reversals reveals no evidence similar to what is currently unfolding. 

Nonetheless, a retracement of this kind is not a rare occurrence. For example, Bitcoin dropped 32% after hitting its first all-time high in January, and a broader look through March 2024 reveals another steep 30% correction. Compared to the over 9% retracement from its current ATH, the long-term bullish trend is still intact.

What Will Bitcoin Do?

Bitcoin broke out of the bollinger bands on the 4-hour chart. The indicator suggests that it may rebound and retrace its losses. However, readings from the 1-day chart indicate that the recovery may be short-term.

MACD displays an ongoing bearish crossover as the BB points to a possible retracement to the lower bands. 

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