Traders assert that Bitcoin offers a prime buying opportunity as its price rebounds towards the $57,000 mark.
Bitcoin experienced a tough start in August, falling over 14% month-to-date due to several negative macroeconomic factors, including an interest rate hike in Japan, deteriorating U.S. employment data, and geopolitical tensions in the Middle East.
Data from Cointelegraph Markets Pro and TradingView indicates that Bitcoin fell to a seven-month low of $49,577 on Bitstamp after losing the critical support of the 200-day EMA and the $50,000 level.
Bitcoin’s drop below $50,000 on Aug. 5 led to significant liquidations, wiping out over $500 billion from the crypto market.
As of publication, Bitcoin had recovered to reclaim $56,000 after finding support around the $54,000 zone, rising 2.5% in the last 24 hours. This recovery has sparked optimism among Bitcoin analysts, who now believe in BTC’s potential to climb higher.
Bitcoin analyst Jelle noted on the X social media platform on Aug. 6 that Bitcoin had “taken out the previous lows and retested the January highs,” adding that the price needed to rise above $57,000 to ensure stability.
Analyst Mags shared a chart on Aug. 6, showing the relative strength index (RSI) as oversold on the daily timeframe. Mags explained that this trend-following indicator had “entered the oversold zone for the 5th time in this cycle,” suggesting that reduced downward momentum from seller exhaustion and buying dips could prompt a BTC recovery.
“Each time the RSI dips below 30, it has been a good opportunity to accumulate Bitcoin,” Mags stated.
Moustache echoed these sentiments, noting that the RSI had given a bullish signal on the daily chart, presenting a “buying opportunity.”
“These things usually happen in the bottom range,” Moustache said.
Kaiko analysts supported this view in their Aug. 5 post on X, revealing that the recent sell-off saw dip buying on U.S. crypto exchanges like Coinbase, Gemini, and Kraken, as evidenced by cumulative volume delta (CVD). A rising positive CVD — the difference between the volume of trades at the ask price and the bid price over time — indicates that buying volume exceeds selling volume.
“While offshore exchanges such as Binance and OKX saw strong selling since Friday, BTC’s cumulative volume delta (CVD) on most U.S. platforms remained positive, suggesting that some traders bought the dip,” Kaiko analysts noted.
The recent BTC flash crash below $50,000 marked a 23.7% decline from its opening on April 20, the day of the Bitcoin halving.
We noted that the latest post-halving correction resembles the 2015–2017 cycle, suggesting that if the pattern holds, a “new bull cycle high” could occur in a few weeks.
We believe Bitcoin is in its “final capitulation” after a flash crash to the bottom of the right-angled descending broadening wedge, projecting Bitcoin’s upside above $90,000.
