After the events of September 7th, most of the market’s cryptocurrencies quickly rallied and returned to their previous prices, with the exception of Bitcoin.

Bitcoin Price Chart | Source: Tradingview

There is currently some resistance on the price chart. Because of this, the king coin has to hit another $ 52,000. The bigger concern, however, is what will investors think? Because during the discount period you inevitably lose a lot.

Will this drive them to sell, and if so, how is the slow recovery affecting investor behavior?

The investors CLEARitcoin is still optimistic

While there were many sell orders on the day of the crash, buying is currently the dominant trend. At the time of writing, Bitcoin appears to be struggling to climb above $ 46,000. That didn’t stop investors from losing interest, however, as they became significantly more optimistic than before.

This positive mood was also evident on the market when the stock market balances fell to a 3-year low.

Bitcoin balance on the exchanges | The source: Glass knot

At the same time, withdrawals from the exchange reached a one-month high. Over 2,500 BTC left the exchange in the past week.

A big factor is the social tendency to “buy the dip”. The trend mainly spurred investors to get into the market as social tools showed searches for the term rose to a 4 month high. In fact, at the time of writing, the indicator was bouncing back to the May threshold.

OFFERSearch engine “purchase dive” rise | The source: mood

Is the purchase the right decision?

Yes, that is indeed a step in their favor. The market has returned to profit after falling into the red yesterday. While there are sellers at a loss, during the decline there are also buyers who are currently making a profit.

Bitcoin Real Profit / Loss Ratio | Source: Glassnode

Price Divergence-DAA also gives a strong buy-signal when it hits a monthly low. The falling price and the increasing number of daily active addresses (DAA) are the right time to take BTC out of the market.

Deviation gNS CLEARitcoins–DAA (pink) | The source: mood

In addition, most addresses are still working in a profitable state. The 4 million addresses with the most losses are also gradually returning to profitability.

Therefore, to put it simply, Bitcoin investors remain undeterred.

BeOnly Bitcoin profit reduced by 10% | The source: In the block

Technical analysis

Bitcoin’s recent decline has raised many questions about its long-term development. After all, the leading digital asset lost 11% in one day – the biggest percentage drop since June 21. If you include the candle wick, the loss is up to 19.2%. Such price drops often trigger panic selling in the altcoin market – something that has become evident in the past few days.

Although retailers are experiencing significant losses, it is important to evaluate the BTC market from a broader perspective. In fact, a closer look at the daily chart shows that the price is still holding above the important levels. In addition, the recent decline does not pose a major threat.

Daily chart

BTC / USD | The source: TradingView

Bitcoin’s chart highlights an interesting relationship with the 200 SMA (green). Usually, a closing price below this long-term moving average will result in a prolonged bear market.

Take, for example, the sale on May 19th. It took BTC almost 3 months to close solidly above this line after hitting multiple lows that lasted as high as $ 29,400. Sometimes movement below the 200 SMA can even result in an instant impact. This happened three times in early August when buyers opposed the downward move. If the second trend continues during this period, market observers need not fear a longer sell-off.

Judging by BTC’s movements since late July, the price is clearly trending up. The higher highs and lows were interrupted by the sharp decline, but the resistance barriers were eventually overturned. To break this trend, BTC must close below the August 12th swing low of $ 43,800.

From there, a trade below $ 42,400 should set off alarm bells across the market.

In fact, the next few days could see a sideways movement below the 20 SMA (red) if the price stabilizes. Expect buyers to regain control if Bitcoin breaks decisively above the 20 SMA.

Stripes Bollinger and RSI

Bitcoin has returned to the lower Bollinger Bands for the first time since July 21. Over the past few months, BTC has bounced back from the lower band from time to time and the same can be expected in the future. However, the 20 SMA (red) will limit short-term gains.

The RSI falling below the descending channel is somewhat of a challenge, but the uptrend is usually undisturbed until the index swings above 40-45. On the other hand, Awesome Oscillator shows lower peaks. This means that the buying pressure is gradually easing across the market.

KYConclusion

Flash crashes are a scary phenomenon, especially in the BTC market. The indicators often turn bearish and there is always the possibility of a prolonged decline.

However, in the long run, such adjustments are considered healthy. While the market could fall lower, Bitcoin will need to hold above $ 43,800 for a faster rebound on the chart. Traders need not fear the possibility of a sustained decline as long as BTC holds above $ 42,400.

You can see the BTC price here.

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

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