Bitcoin Structure Weakness: Is This The End Of BTC’s Relief Rally?

Bitcoin Structure Weakness: Is This The End Of BTC’s Relief Rally?

Bitcoin [BTC] The bears showed weakness in early August after failing to move towards their support line. Fast forward to the present and a similar observation has occurred with bulls.

This confirms the weakness of the structure, but also underscores further uncertainty regarding BTC’s next move.

After briefly managing to break above $25,000, BTC bulls failed to summarize further to the upside. Instead, the king coin adopted a pullback to its press time price of $23,806.

However, it also appears that this week’s downside performance has been limited.

Source: TradingView

A closer look at its indicators reveals that, at first glance, BTC could be heading for a few more downsides.

For example, its Relative Strength Index (RSI) just crossed below its 14-day SMA, confirming the weakness of momentum on the bulls’ side.

The RSI has also been moving within a trend line and this can also provide a rough idea of ​​where BTC is headed.

Source: TradingView

Bitcoin’s RSI is retesting a support line, from which it bounced back inside its ascending range. However, it had already crossed slightly below this line at press time, indicating a significant probability of a pattern breakout.

The current result does not necessarily mean that BTC is headed for further downside. There is still a chance of a bounce from the support level. However, on-chain metrics might be better suited to explain current outcome and potential direction.

Where is Bitcoin’s bearish pressure coming from?

Purpose Bitcoin ETF holdings reduced their BTC balance by approximately 3,398 BTC from August 11-16.

That’s roughly $81 million in selling pressure. While this may not be much compared to Bitcoin’s market capitalization, it could have a substantial impact if the amount of BTC on exchanges is low.

Accumulated selling pressure from other holders can also contribute to further downside.

Source: Sentiment

Addresses holding more than 1,000 BTC have also added to the selling pressure in recent days.

The number of addresses in the aforementioned category dropped by three addresses in the last three days.

While this might not indicate much selling pressure, if those three addresses were to sell all of their BTC at their current market value, then we would expect selling pressure of over $70 million.

Meanwhile, the number of sending addresses, at the time of publication, outnumbered receiving addresses. This aligns with increasing selling pressure in recent days.

Source: Sentiment

Well, the observation underlines the drop in prices in recent days. However, there is still a remarkably healthy demand for BTC.

Either outcome is still likely at this point. But, in case of further downside, investors should look for support between $22,000 and $22,600. An alternate outcome could push BTC above $25,000.

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