BTC Price Approaches $58K CME Gap Amid Two Bitcoin ‘Death Crosses’ Signals

Bitcoin is grappling with liquidity challenges despite staging a notable recovery from its six-month lows. The question remains: can the upward trend in BTC price sustain itself?

Current Market Overview

As of August 7, Bitcoin (BTC) fluctuated around $56,000 during the Wall Street open, raising concerns over the lack of market support.

Bitcoin Faces ‘Death Crosses’ and Low Liquidity

According to data from TradingView, the recovery in BTC price seems to be stalling, remaining steady against the daily open.

Despite a rise of approximately $7,000 from the lows seen on August 5, market analysts have pointed out persistent worries regarding the uncertain trading environment.

A study of the order book conditions across exchanges by trading analytics provider Material Indicators suggested that the price could potentially move in either direction based on existing buying and selling liquidity.

“The amount of BTC ask liquidity between here and the CME Gap fill is significant, but not insurmountable. The concern is that there aren’t any large buy walls in the active trading range to create a foundation for a stronger move up. Let’s see if that changes after TradFi opens and the CME Gap is open for business.”

The discussion also highlighted the ‘gap’ in CME Group’s Bitcoin futures market, which could create a price target between $57,845 and $58,845.

Continuing the analysis, Material Indicators co-founder Keith Alan warned of two ‘death crosses’ involving different moving averages but noted that any negative implications could still be mitigated.

“Trend Precognition and the MACD are both signaling a momentum shift on the Bitcoin Daily chart. The bullishness of those signals is somewhat dampened by the death cross between the 21-Day and 100-Day MAs. It appears that the 50-Day and the 200-Day are also on a similar path,” he explained.

“It’s worth noting that Death Crosses are lagging indicators. A fast recovery could unwind them, and if BTC bulls can manage to fill the CME Gap today and continue upward that would be a sign of strength. Failure to fill the gap or a rejection from the top of the gap would be a concern for bulls.”

Trader Sentiment: Cautious Optimism

The broader macroeconomic climate remains uncertain, leading traders to adopt a “wait and see” approach.

In a recent update to their subscribers, trading firm QCP Capital advised cryptocurrency traders to keep a close watch on macroeconomic correlations.

“While the initial shock may have passed, we foresee continued selling pressure in the coming days as systematic funds continue to pare exposure in light of the heightened volatility. We recommend keeping a close eye on Nasdaq, Nikkei, and USDJPY as cross-asset correlations remain high in the near term.”

QCP also reiterated a previous perspective on long-term profitability, suggesting that the cryptocurrency market could now be more suitable for long positions.

“With the acute phase of market volatility over, we favor establishing longer-term bullish positions in anticipation of a cutting cycle. We prefer trades with a 3-6-month time horizon to prevent getting chopped given higher volatilities,” they concluded.

This content does not offer financial advice or recommendations. All investment and trading decisions involve risks, and readers should conduct their own research before making any decisions.