Bitcoin Declines Below $29.5K After Bullish Breakout – Is Bearish Pressure Chasing BTC Price?

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Recently, Bitcoin’s value has experienced a substantial decrease, plunging under the $29.5K threshold. This downturn is surprising, especially following a bullish breakout that had previously sparked bullish confidence among traders with MicroStrategy’s BTC purchase plans. The ensuing drop in Bitcoin’s price implies the presence of bearish pressure, suggesting that the recent surge may have been a trap for traders. 

Bitcoin Addresses Head Toward Loss

According to a recent report by Glassnode, the quantity of Bitcoin addresses in loss (based on a seven-day Moving Average) reached an approximate peak of 14.043 billion earlier today. This sets a new one-month record, surpassing the previous high of 14.041 billion observed on July 31, 2023.

This trend indicates a group of investors who purchased BTC at high prices and are currently experiencing losses due to recent price volatility. “Every short position accumulated over the past few days has been completely eliminated,” stated analyst Byzantine General in a recent tweet. 

This assertion is supported by data from Coinglass, which reveals that BTC short positions worth $28 million were liquidated, with an additional $13.8 million liquidated following the recent plunge. This represents the largest short liquidation since July 14, and it undoubtedly has a substantial impact on the current price movement. 

The market capitalization of BTC has also seen a significant decrease, with a loss exceeding $14 billion in just a day. The asset’s market cap has dropped from a peak of $582 billion to its current level of $568 billion.

Interestingly, the trading volume of Bitcoin has followed a notably different trajectory over the same period. Rather than mirroring the recent decline in BTC price, the trading volume has been experiencing a slight upward trend.

BTC Price Prepares For Another Decline

Bitcoin faced low buying pressure after the price surged above $30K. As a result, bears gained control and opened short positions, plunging the asset heavily below $29.5K. Currently, the BTC price is in a freefall, and it may again touch its crucial support near $28,500 this week if buyers fail to take control. As of writing, BTC price trades at $29,249, declining over 0.09% in the last 24 hours. 

The declining trend of the BTC price below EMA20 and the RSI steeply falling toward the midline imply a great advantage for the bears. Any efforts to initiate a reversal now could encounter selling pressure at the 20-day EMA. If the price dips from $29K and breaches the $28,500-$28,300 region, it could trigger a drop to $27,200. 

To prevent this decline, bulls would need to hold the price above the 20-day EMA. The BTC price could initially climb above $29,500 and then to the resistance zone near $30.1K again