Bitcoin (BTC) experienced a challenging start to August, with its price falling over 14% month-to-date due to negative macroeconomic factors, including an interest rate hike in Japan, worsening US employment data, and geopolitical tensions in the Middle East. Data from TradingView shows that Bitcoin dropped to a seven-month low of $49,577 on Bitstamp after losing the key support provided by the 200-day EMA and the $50,000 level.
Massive Liquidations and Market Wipeout
The drop below $50,000 on August 5 led to significant liquidations, wiping out more than $500 billion from the crypto market. However, Bitcoin has since recovered, reclaiming $56,000 after finding support around the $54,000 zone, marking a 2.5% increase over the last 24 hours.
BTC/USD daily chart. Source: TradingView
Analysts Predict Recovery
This recovery has sparked optimism among Bitcoin analysts, who now believe in BTC’s potential to climb to higher levels. Analyst Jelle noted on August 6 that Bitcoin needed to get back above $57,000 to ensure that “all is well.” Another analyst, Mags, shared a chart showing that the relative strength index (RSI) is oversold on the daily timeframe, indicating a potential recovery driven by reduced downward momentum and increased buying interest.
Mags’ Analysis and Buying Opportunity
Mags explained that the RSI had entered the oversold zone for the fifth time in this cycle, suggesting that buying the dips could initiate a recovery in BTC. Each time the RSI dips below 30, it has historically been a good opportunity to accumulate Bitcoin. Analyst Moustache echoed similar sentiments, highlighting that the RSI had sent a bullish signal on the daily chart, presenting a “buying opportunity.”
BTC/USD chart. Source: Mags
US-Based Exchanges Show Positive Trends
Kaiko analysts corroborated this in their August 5 post on X, revealing that the recent sell-off was characterized by dip buying on US-based crypto exchanges such as Coinbase, Gemini, and Kraken. The cumulative volume delta (CVD) indicated that buying volume exceeded selling volume on these platforms.
Source: Peter Brandt
Historical Context and Future Projections
Veteran trader and analyst Peter Brandt noted that the latest post-halving correction is similar to the 2015–2017 cycle, suggesting that if the pattern holds, a “new bull cycle high” could be seen in the coming weeks. Titan of Crypto believes Bitcoin is in its “final capitulation” phase after the recent flash crash, projecting an upside above $90,000. A relief rally from current levels wouldn’t be surprising, given the historical patterns and current market conditions.
