Bitcoin is holding onto the $55,500 support level, but concerns are growing among traders due to an increase in futures open interest and the emergence of a “death cross” on the BTC chart. This bearish signal, where the 50-day simple moving average (SMA) dips below the 200-day SMA, has traders on edge about potential further declines.
Institutional Investors Show Confidence Despite Sideways Action
Despite Bitcoin’s sideways price action in recent months, institutional investors remain confident, with more than 262 new firms investing in U.S. spot Bitcoin exchange-traded funds (ETFs) in Q2 2024. According to Vetle Lunde, a senior analyst at K33 Research, these investors have largely maintained or increased their positions. Bitwise CIO Matt Hougan highlighted that 44% of asset managers boosted their Bitcoin ETF holdings, while only 13% exited their positions.
Crypto market data daily view. Source: Coin360
Near-Term Outlook Turns Bearish
While the long-term outlook for Bitcoin remains positive, analysts are becoming more cautious in the short term. Cryptocurrency analysis platform Coinglass pointed out that the rising open interest in Bitcoin suggests there could be more room for a price decline. If Bitcoin fails to hold the $55,724 support, it could trigger a fall to $50,000.
Ethereum and Altcoins Under Pressure
Ethereum (ETH) also faces challenges, with the price of attempting to recover from support being nearly $2,500. However, ETH is expected to encounter strong selling pressure between the $2,772 and $2,850 levels. A failure to break through could increase the risk of a dip below $2,500.
BTC/USDT daily chart. Source: TradingView
Other major cryptocurrencies, including Binance Coin (BNB), Solana (SOL), XRP, and Dogecoin (DOGE), are similarly at risk of breaking down. Solana, for example, could drop to $130, and a breach of this level may see it retest the critical $116 support. XRP is locked in a battle near the $0.57 level, while Dogecoin struggles to stay above $0.10.
As Bitcoin and altcoins navigate these crucial support levels, traders remain cautious, keeping a close eye on market developments that could signal the next significant move.
