Bitcoin’s value has dropped a lot, more than 4%, in the last 24 hours, and it is now worth less than $60,000. As of August 4, the most popular cryptocurrency is going through a tough phase. It is trying to reach the low point of the spring phase, which is around $53,400 in the Wyckoff reaccumulation pattern.
According to independent expert Moustache, this pattern shows that after a long uptrend, there are periods of consolidation and accumulation. This suggests that the price may continue to rise towards a new Last Point of Support (LPS) at around $70,000 per share.
Bitcoin Faces $74K Potential
The Wyckoff reaccumulation pattern consists of nine main components. They are the preliminary supply (PSY), the buying climax (BC), the automatic reaction (AR), the secondary test (ST), the spring, the test, the last point of support (LPS), and the sign of strength (SOS). Bitcoin is now in the “test” phase, where it is trying to prove that the low point from the spring phase is a support.
A strong market rise and a strong upward movement characterize the final phase, the Sign of Strength (SOS). If this works, it could mark the start of a new upswing. Analysts are hopeful that the price will try to reach $74,000 again in the coming weeks, even though it has recently gone down.
This prediction is based on the Wyckoff reaccumulation pattern becoming stronger and the growing chance of three rate cuts by the end of 2024. Bitcoin’s price, on the other hand, has dropped 10% since August 1, the same day as the US stock market.
Reports of rising unemployment claims and falling industrial activity in the US happened at the same time as this drop. Consequently, investors withdrew about $200 million from Bitcoin exchange-traded funds (ETFs).
Interestingly, Bitcoin’s current decline is occurring despite the expectation of multiple rate cuts in 2024. This is very different from last year, when weak economic news often boosted crypto markets. Fears of a decline have probably driven this change since the last US jobs report.
In the past, Bitcoin has faced challenges during periods of significant concerns about a potential slowdown. For example, during the COVID-19 market crash in March 2020, Bitcoin fell along with the US stock market. The value of cryptocurrencies didn’t start to rise again until the Federal Reserve began quantitative easing and rate cuts.
