In recent times, Bitcoin [BTC] saw a notable decline, similar to other digital currencies, in the aftermath of the market crash on August 5th.
Following a temporary recovery pushing Bitcoin to $60K, it encountered significant resistance and swiftly dropped back to $54K.
Analysis of BTC price movement over a one-hour timeframe revealed shallow orderbook depth at the 0-1% and 1-5% levels. Historically, shallow orderbooks have often marked the bottom of an upward trend, signaling an impending bullish phase.
This observation underscores the importance of closely monitoring orderbooks for potential reversals in Q4 of 2024 to anticipate future price shifts.
Bitcoin Fibonacci Retracement Levels
Observing Bitcoin’s price trajectory, BTC failed to honor the 0.618 Fibonacci level but found support at the 0.786 level, which has been the most reliable retracement point this year.
The 0.786 level now stands as the final opportunity for establishing a higher low, which, if paired with low orderbook depth, could indicate a forthcoming recovery.
If Bitcoin mirrors previous trends, addressing the substantial wick created by the Japanese stock market crash might trigger a rebound, driving prices higher.
However, a deviation from this pattern could lead to further BTC declines before a potential upswing.
Bitcoin’s Mayer Multiple Band
The Mayer Multiple Band offers additional insights into Bitcoin’s current bull cycle, suggesting that the cycle hasn’t concluded yet, with a potential target of $95K, which would not mark the cycle’s termination.
A more extended target of $140K remains plausible. Long-term traders may consider steering clear of short-term charts until Bitcoin hits a fresh all-time high.
The current Bitcoin cycle’s longevity and intensity seem more pronounced than prior cycles, hinting at prospective growth ahead.
Bitcoin Adjusted Dormancy Flow
Monitoring the Bitcoin adjusted dormancy flow serves as another crucial indicator, with the metric currently hovering around $10. Historically, Bitcoin prices have consistently rebounded from these levels.
When coupled with shallow orderbook depth, this bolsters the notion of an impending Bitcoin price uptick.
There’s also the probability of Bitcoin briefly dipping to $50K before embarking on a substantial upward trajectory, potentially surpassing its previous peak.
Rising Bitcoin Whale Activity
Lastly, there’s a notable uptick in whale activity, with BTC whales expanding their long positions with modest leverage, typically ranging between 1.2x and 3x.
Unlike retail traders, whales deploy algorithms to gradually Dollar Cost Average (DCA) into low-leverage long positions as prices drop, sidestepping emotional decision-making processes.
This strategic accumulation by Bitcoin whales amid market downturns could propel BTC prices to new highs, laying the groundwork for a substantial price surge.