Despite recent market corrections, Bitcoin traders remain optimistic, signaling a potential recovery even as BTC price tests the 200-day moving average and risks further decline.

BTC Price Action and Market Overview

Bitcoin (BTC) continued its downward trend on July 4, falling 3.34% in the last 24 hours and 5.82% over the past week. According to Cointelegraph Markets Pro and TradingView, BTC hit a one-month low of $56,709, dropping below the crucial $60,000 psychological support level.

The total cryptocurrency market capitalization has decreased by 4.23% in the past 24 hours, settling at $2.13 trillion. The trading volume surged by 42%, indicating intense selling pressure.

Liquidations and Market Sentiment

Bitcoin’s drop below $57,000 has led to significant liquidations across the crypto market. Data from Coinglass reveals that $98.04 million worth of long Bitcoin positions were liquidated within 24 hours, compared to $22.6 million in short positions. Overall, $333.1 million in leveraged long crypto positions were liquidated against $50.52 million in shorts.

Despite the bearish trend, analysts remain hopeful about Bitcoin’s recovery. Bitcoin analyst Jelle noted a bounce back above the 200-day exponential moving average (EMA), suggesting potential for a bullish divergence from the daily relative strength index (RSI).

Analyst Insights and Predictions

Fellow analyst Skew highlighted that Bitcoin is retesting the 200-day moving average (MA) for the first time since October 2023, before the approval of spot Bitcoin ETFs. Skew emphasized the need for market demand and reversal signs to trigger a systematic market change.

At the time of publication, Bitcoin had moved back above the 200-day EMA, currently at $58,256. Analyst Rekt Capital pointed out that Bitcoin’s current 22% pullback has lasted approximately 45 days, categorizing it as an above-average correction.

Pseudonymous analyst Yoddha declared that the “local bottom is in” for Bitcoin, while Moustache noted that retesting the 200-day EMA has consistently marked a bottom range over the last 18 months.

Potential for Recovery and Market Dynamics

Moustache further explained that the ongoing correction is a healthy pullback, setting up Bitcoin for a massive breakout. This view aligns with the Wyckoff reaccumulation method, suggesting a significant “Spring” event could be on the horizon.

Daan Crypto Trades observed more than $200 million in long positions entered as Bitcoin moved back above the 200-day simple moving average (SMA), indicating strong market confidence. CoinGlass data shows $57,615 as a key area of 12-hour bid liquidity with about $24.61 million in buy orders, which could provide the necessary demand pressure to reverse the downtrend.

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