Bitcoin (BTC) Price May Be a Natural Correction After an Extended Bull Run

At the beginning of August, a wave of Bitcoin liquidations wiped out hundreds of millions.

Bitcoin traders liquidated over $280 million in the first day of August, recent data shows. At press time, BTC had fallen to $60,420, as per CoinGecko.

A wave of Bitcoin liquidations wiped out hundreds of millions at the beginning of August. This follows a massive sell-off that saw the world’s largest cryptocurrency lose over $2,600 in a matter of hours.

Bitcoin traders liquidated over $280 million in long positions on the first day of August, CoinGlass data shows. At press time, Bitcoin had fallen to $60,420, as per CoinGecko.

Sellers clearly have the balance of power now. The fear of missing out (FOMO) that drove traders into the market earlier in 2021 has largely dissipated. Many traders are now sitting on large profits and are eager to sell their holdings at a higher price.

This is putting pressure on buyers to step up and support Bitcoin at key levels. If they fail to do so, we could see further sell-offs in the coming days and weeks.

However, that’s no cause for panic. A change in market sentiment could lead to a quick market shift, relieving pressure and stabilizing the price.

The recent volatility may be a natural correction after an extended bull run. A bull run is a period of sustained price increases. During a bull run, the market sentiment is typically positive, and buyers are eager to purchase assets in anticipation of further price gains. Alternatively, market uncertainty might prevail.

A Bitcoin price uptrend could follow

Despite the recent sell-off, an analyst noted that the price movement on the higher timeframes still suggests an uptrend. In particular, the analyst observed a five-wave uptrend from the recent lows. This uptrend began around $56,800 and reached highs of $69,885.

After reaching the highs, the price is now forming an ABC correction. This correction will have an overarching wave B, followed by an overlapping wave C that completes the correction and leads into the next uptrend.

According to the analyst, wave B of the ABC correction ended around the $69,885 mark. This level coincides with a historical resistance zone, which might cause Bitcoin to struggle to break through it.

Additionally, the analyst highlighted the significance of the $66,745 level, which could act as a resistance level for the biggest digital asset. This level might hinder Bitcoin’s further ascent on the higher timeframes.

The analyst also noted that the 1.618 Fibonacci extension level could serve as a potential support area. This critical level coincides with other important support levels, including the Value Area Low (VAL) and the 0.5 Fibonacci retracement level. These combined support levels could help prevent further sell-offs.

Watch for a buying level between $61,800 and $62,300

As the price continues to unfold, an analyst noted to watch out for a crucial buying level on the higher timeframes. This level is situated between $61,800 and $62,300 and could dictate Bitcoin’s price action in the coming weeks.

Bitcoin’s possible uptrend on the higher timeframe remains intact. A further sell-off to lower support at $56,800 is possible as Bitcoin dropped below $61,800.

Another crypto analyst predicted on X that Bitcoin could reach a new ATH in September or October. This is possible if it holds above $60,000. We’ll have to wait and see.