Bitcoin [BTC] turns bearish again after reclaiming $61k; What's going on?

In the last 24 hours, optimism in the crypto market increased as Bitcoin [BTC], the king of cryptos, reclaimed $61k.

Bitcoin [BTC] began trading in the $61k range on the 19th of August, following a bullish trend that saw the coin gain over 2% in the last 24 hours. However, the scenario changed drastically on the 20th.

The coin faced immense selling pressure as the bears took over the market. As a result, BTC dropped below the crucial level and began trading in the red zone. Let’s have a closer look at what went down with BTC.

Bitcoin turns bearish again

After gaining bullish momentum and managing to go above $61k on the 20th of August, the scenario changed as the bears took over the market.

According to CoinMarketCap, BTC dropped by over 2.5% in the last 24 hours. At the time of writing, the coin was trading at $59,378.99 with a market capitalization of over $1.17 trillion.

Interestingly, this recent price correction was foreseen. A popular crypto analyst, Ali, took to Twitter to reveal that BTC’s TD sequential flagged a sell signal. Soon after the signal got revealed, the coin’s price witnessed a correction.

A look at CryptoQuant’s data revealed quite a few factors that might have played a role in cursing BTC to plummet. As per our analysis, BTC’s exchange reserve was rising, indicating an increase in selling pressure.

The fact that investors were selling Bitcoin was further proven by its exchange netflow as it increased.

To be precise, BTC’s net deposit on exchanges was high compared to the 7-day average. Higher deposits can be interpreted as higher selling pressure. Despite this, BTC’s Coinbase Premium remained green, suggesting that buying sentiment was dominant among US investors.

Source: CryptoQuant

What’s next for the coin?

A glance at Glassnode’s data helped us gauge the odds of this bearish trend continuing. We found that Bitcoin’s NVT ratio dropped significantly.

A decline in the metric indicates that an asset is undervalued, hinting at a price increase. For starters, the NVT ratio is computed by dividing the market cap by the transferred on-chain volume measured in USD.

Source: Glassnode

However, things in the derivatives market didn’t look in buyers’ favor. For instance, BTC’s taker buy/sell ratio turned red. This clearly meant that selling sentiment was dominant in the futures market.

Hence, AMBCrypto checked BTC’s daily chart to better understand what to expect. The technical indicator MACD displayed a bullish crossover.

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BTC’s Relative Strength Index (RSI) was slowly approaching the neutral mark, which was a bullish signal.

Despite this, the Chaikin Money Flow (CMF) turned bearish as it registered a downtick.

Source: TradingView

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