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What’s Next as Bitcoin Dips Below Another Support Level?

Bitcoin (BTC) remained under selling pressure, as sellers pushed price below the $61.7k support level.

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The bullish bounce by Bitcoin (BTC) that took it from $58k to $65k between 2 May to 6 May was short-lived, with sellers quickly reclaiming the short term market dominance after the price rejection at $64.7k.

This extended dip after the price rejection at $64.7k saw BTC break the next support level at $61.7k with a 2.31% drop over the past 24 hours. With BTC back under the descending trendline on the four-hour timeframe, it could offer profitable short term trading setups for intraday traders.

Can Bears Extend Bearish Momentum?

BTC/USDT on TradingView (4H Timeframe)

Over the past two days, the RSI (Relative Strength Index) has trended under the neutral 50. This showed a weakening of the buying pressure and an increase in the selling pressure.

Furthermore, this was amplified by the sharp departure of capital from BTC within the same period. The CMF (Chaikin Money Flow) which tracks the inflow and outflow of capital from tokens showed a sharp drop from positive (+0.42) to negative (-0.19).

Traders looking to trade this selling trend can short BTC from the current market price of $61.1k with a profit target at $58.7k. However, traders must be on alert for potential changes in market sentiment, due to BTC’s volatility.

Cautious Moves in Futures Market

Market participants in the futures market opted for a watchful approach to the latest dip with a decrease in open contract positions. According to data from Coinalyze, BTC’s Open Interest (OI) dropped by 1.12% over the past 24 hours.

BTC’s price action along with the on-chart indicators and dipping open interest hinted at an extension of the bearish pressure in the near term.

BTC Open Interest | Coinalyze

Disclaimer: This article does not constitute trading, investment, financial, or other types of advice. It is solely the writer’s opinion. Please conduct your due diligence before making any trading or investment decisions.