Bitcoin (BTC) absorbs the selling – is the bottom in?
As the German government continues to sell $BTC, and Mt. Gox creditors are starting to receive their disbursements, Bitcoin is still under selling pressure. That said, the price is holding above $55,000 and indicators are showing that Bitcoin is oversold. Is the local bottom now in?
Constant drip, drip of selling
According to Lookonchain, the German government transferred 1,000 $BTC out of its wallet earlier today, and deposited exactly half of it to Coinbase and Bitstamp. Another potential 1,000 BTC being sold takes the German holdings to 38,826 $BTC.
This constant drip, drip of selling is bound to have its effect on the market. However, this should now be priced in, as well as the potential selling from Mt. Gox creditors.
Therefore, with Bitcoin looking to be quite oversold now, there is going to be a huge battle of sellers and buyers over these next few months. Short term retail holders have been forced out of the market during the panic of the last several days, and it now remains to be seen if institutional money will be buying at these low levels.
$BTC below 200-day MA
Source: TradingView
On the daily chart above, it can be seen that $BTC is below the 200-day moving average (red line). This isn’t a line that $BTC would normally be below for any length of time in a bull market. The last time $BTC experienced this was for a period of time back in September 2023.
Bull flag is redrawn
From a chart pattern perspective, the wick down to the last bottom at $53,500 enabled a redraw of the Bitcoin bull flag. This bottom corresponded perfectly with a third touch of the lower bull flag trend line, and possibly means that the price could head back to the top of the bull flag and another potential breakout opportunity. It is still early days, but this would be a great place for a trend reversal.
Source: TradingView
Zooming out into the weekly time frame, the bull flag and its touch points can be better seen. It should also be noted that at time of going to press $BTC has put on a bit of a spurt. The price is up more than 3% on the day so far and it might be that $BTC will attempt to get back above the 200-day MA. If it is successful, perhaps this move can be something more than just a relief bounce.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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