At the edge of a bearish breakdown, Bitcoin (BTC) has a slim chance of holding the $25,000 support level. On Sept. 11, the cryptocurrency broke from its parallel range between $25,500 and $26,500, plunging to an intraday low at $24,950. If the daily close is below $24,750, it could lead to a drop to the sub-$20,000 range. According to pseudonymous trader Horse, $25,000 is the prime area to trap sellers and offers the best risk-to-reward ratio for long-term investors. Global market activity and on-chain indicators reaching historical lows could give buyers hope that a positive trend could emerge.
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Is DXY tapping out?
Bitcoin’s price has been positively correlated with stocks, while it has been negatively correlated with the U.S. Dollar Index (DXY). On Sept. 11, when the S&P 500 and Nasdaq stock market indexes were trading higher, the DXY was falling.
The DXY is currently tapping its long-term range high levels around 104.8 points, which could indicate a potential negative price reversal. If a bearish dollar occurs, it could be beneficial for Bitcoin’s price.
The Consumer Price Index (CPI) print in the United States on Sept. 13 will likely provide a decisive direction to the global markets.
Bitcoin traders could secure profits at $26,000
The recent report of on-chain analytics outlet Glassnode showed that the price decline of Bitcoin in the last few weeks caused several parameters to reach their historical lows.
The current market situation is characterized by low liquidity and low trading volumes, making it difficult for bulls to break multiple resistance levels. However, long-term holders could start accumulating as the bullish sentiment cools down.
According to Glassnode:
Most of the short-term supply has gone into an unrealized loss due to the bearish price movements since mid-August, which could act as a potential short-term reversal level.
Glassnode also noted that “volatility, liquidity, trade volumes and on-chain settlement volumes are at historical lows”, pushing the market into “extreme apathy, exhaustion, and arguably boredom.”
Thus, a lot of sellers may enter the market in case of a bullish reversal, especially near the break-even level of short-term buyers around the $26,000 level.
Based on the DXY and on-chain data, buyers could return sooner than expected, making the current price action a potentially profitable opportunity to open Bitcoin longs.
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