Bitcoin Price Consolidates Near $113,000 Amidst Predictions of Impending Volatility
Bitcoin (BTC) encountered challenges sustaining its value above $113,000 following the Wall Street opening on Tuesday, with market observers suggesting the possibility of fresh price declines.
BTC/USD 1-hour chart. Source: Cointelegraph/TradingView
$109,000 Emerges as Potential Target for Bitcoin’s Price
Data compiled from Cointelegraph Markets Pro and TradingView indicates that Bitcoin’s price movement is currently constrained within zones characterized by significant order-book liquidity. This limited scope for price fluctuations has led some analysts to anticipate further downward pressure in the near term.
“$BTC is anticipated to decrease before any potential increase,” stated trading resource Material Indicators on X, formerly known as Twitter.
BTC/USDT order-book liquidity data with whale order volume. Source: Material Indicators/X
A corresponding visual representation of BTC/USDT order-book liquidity on Binance, a leading global exchange, reveals a relative scarcity of substantial buy orders above the $110,000 mark.
Furthermore, Glassnode, a firm specializing in on-chain analytics, has been monitoring the cost basis of recent Bitcoin purchasers, also suggesting that levels around previous all-time highs could act as a support level for Bitcoin’s price.
“For $BTC, the gap between $109,000 and $116,000 is gradually being filled on dips. This pattern indicates consistent investor involvement over the past month,” Glassnode noted. “To date, we observe minimal distribution from the $118,000 to $120,000 range, implying that these holders are electing to hold through current price action.”
Bitcoin cost basis distribution heatmap. Source: Glassnode/X
However, not everyone is anticipating a more pronounced decline in Bitcoin’s price. TheKingfisher, a prominent voice on X, highlighted the attraction of sell orders positioned above the current price, based on liquidity analysis.
“Look at $BTC – nearly 70% of liquidations are short positions located above us,” the post stated, accompanied by a chart illustrating crypto long and short distributions. “This indicates a substantial reservoir of fuel awaiting utilization. Institutions often capitalize on these liquidity hotspots. We are monitoring for that flush.”
Crypto long/short liquidation distribution as of August 5. Source: TheKingfisher/X
Bitcoin Volatility Anticipated to Re-emerge
Daan Crypto Trades, a well-known trader, is keeping a close eye on resistance formed by the 200-period simple moving average (SMA) and exponential moving average (EMA) on 4-hour charts.
“Bulls need to surpass this region to regain control and target higher levels,” he commented.
BTC/USD 4-hour chart with 200-SMA, EMA. Source: Cointelegraph/TradingView
Crypto trader, analyst and entrepreneur Michaël van de Poppe suggested that the current range-bound behavior of Bitcoin’s price is unlikely to persist indefinitely.
“Patience is necessary when dealing with $BTC. There is no breakout upwards, and no breakout downwards,” he summarized on Tuesday. “Volatility is decreasing, suggesting that a significant move is on the horizon once again.”
BTC/USDT 4-hour chart with RSI data. Source: Michaël van de Poppe/X
Disclaimer: This content is for informational purposes only and should not be considered financial advice. Trading and investing in cryptocurrencies involve significant risk, and you should conduct thorough research and consult with a financial advisor before making any decisions.