If the short-term downtrend persists, this is the level to watch

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The price of Bitcoin has fallen to an intraday low of $ 55,640 (on Bitstamp) and is currently down around 3.5% on the day and 11.8% on the week.

The entire market appears to be struggling, with the exception of the cryptocurrencies associated with Play-to-Earn games and projects related to the Metaverse. Bitcoin has managed to recover to around $ 57,000, where it is currently trading as the market seeks the next direction.

Chart by TradingView

The overall trend in fundamentals and the chain remains firmly bullish despite this decline. Right now, the pressure seems to come from panic over younger coins selling at a loss and liquidations of over-leveraged long positions.

Short term technical data calls for caution as there is short term bearish momentum in the market and we have to wait for signs of a reversal. The area of ​​support between $ 58.3K and $ 53K is still the one to look for.

Older cohorts and miners are not selling aggressively throughout the current pullback, while the STH SOPR is less than 1, indicating that short-term holders (STH) are making losses. Spot reserves tend to go down, but Binance reserves tend to go up.

The leverage ratio is still high at 0.20, and it’s good to prepare for further liquidations just in case. It is possible to see a wick of $ 55,000 to $ 53,000.

As we mentioned in our previous analysis, the area between $ 58.3K and $ 53K seems like a good place to accumulate as the bull market still has a lot of potential depending on chain and fundamental metrics.

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TradingView cryptocurrency charts.

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