On July 12, the crypto community was buzzing with reports from various on-chain data sources and independent analysts announcing that the German government’s Bitcoin wallets now have a zero balance. This news has led to speculation that Bitcoin (BTC) could see a price increase now that this presumed sell-pressure has been removed. However, despite this development, Bitcoin’s price remains within a narrow range, with resistance at $60,000 and support at $54,000. Let’s dive into the technical factors that have been influencing Bitcoin’s recent price behavior.
Bear Flag Continuation and $60,000 Resistance
Bitcoin’s fall from $60,000 confirmed the M-top (double-top) pattern, leading to a bear flag continuation trend. This downtrend has been marked by increasing sell volume, while attempts to break out have been met with weak buy volume. For a reversal, traders are looking for a strong, high-volume move above $60,000, where the 61.8% Fibonacci retracement level is located, followed by a few daily closes above this level to establish solid support.
Bitcoin Order Book Depth and Liquidation Levels
In the crypto market, prices often move towards areas of high liquidity. Analyzing the BTC/USD volume profile against Bitcoin’s order book depth in the 2% to 5% range shows that Bitcoin’s price has been bouncing between bids around $54,000 to $57,000 and a block of asks at $60,000. Liquidation maps reveal that leverage traders have placed significant long positions around $56,500. If the price drops below this level, it could reinforce the current bear flag continuation pattern.
Potential Sell-Pressure from Mt. Gox Redemptions
While some market participants are hopeful that Bitcoin’s price might reverse trend now that the German government has sold off its BTC holdings, another potential source of sell-pressure looms. The anticipated release of 140,000 Bitcoin to Mt. Gox clients could result in significant selling pressure, potentially keeping Bitcoin within its current range or driving it down to the M-top target of $44,000.
Conclusion
The removal of the German government’s Bitcoin holdings might bring some optimism, but technical indicators and potential upcoming sell-pressure events suggest caution. The battle between bulls and bears continues, with $60,000 and $54,000 being critical levels to watch.
