Bitcoin (BTC) price rebounded to over $55,000 on Tuesday after experiencing a sharp decline since late July. Renowned economist Jeremy Siegel has urged for emergency interest rate cuts following the recent market turmoil. Meanwhile, data from Arkham Intelligence indicates that key investors, including BlackRock, MicroStrategy, Grayscale, and Fidelity, have maintained their Bitcoin holdings throughout the sell-off. On-chain data also reveals that short-term investors are selling off their Bitcoin in panic, suggesting a possible slight recovery before the downtrend continues.
Last Friday, Bitcoin’s price fell below an ascending trendline formed by multiple swing lows since July 5, leading to an 11.6% drop over the next three days and testing daily support at around $49,917 on Monday. By Tuesday, Bitcoin showed a modest recovery, trading 3.5% higher at $55,892.
BTC/USDT daily chart
In this context, Bitcoin could experience a dead-cat bounce—a brief price increase amid a larger downtrend—potentially facing resistance at the 61.8% Fibonacci retracement level of $62,066, derived from the swing high of $70,079 on July 29 to Monday’s low of $49,101. This resistance level aligns with the broken trendline and the 100-day Exponential Moving Average (EMA) at approximately $65,596, making it a crucial reversal zone.
Failure to surpass the $62,066 mark could trigger a 19% decline, possibly retesting the daily support level of $49,917.
The Relative Strength Index (RSI) on the daily chart is around 32, slightly above the oversold threshold, indicating the potential for a temporary relief rally before the downward trend resumes. However, a close above the August 2 high of $65,596 could alter the market structure by forming a higher high on the daily timeframe, potentially driving a 6% increase in Bitcoin’s price to retest its weekly resistance at $69,648.