Bitcoin Breaks $56K Support With $2.4B Sell-Off: Next Critical Demand Zone Identified

The recent Bitcoin price drop has led to significant selling pressure from investors, particularly those who bought Bitcoin between January and March of this year. As highlighted by CryptoQuant, an analytic firm, approximately $2.4 billion worth of Bitcoin aged between three and six months has been moved onto the network during the downturn. 

Those investors, who initially intended to speculate on ETFs and halving events that happened during Jan and April of 2024, have now been washed out. While technically classified as “long-term” holders, their behavior closely matched the traits of short-term investors.

Conversely, entities that have held Bitcoin for over a year have not significantly increased their spending. It indicates that true long-term holders are still maintaining their positions. This contrast highlights the differing strategies and confidence levels among various investor groups. 

As noted by CryptoBusy, an analyst, the ongoing sell-off has broken the crucial $56,000 support level. If the crypto community cannot muster sufficient buying interest at this price, the next support level will likely be at $53,000. A major demand zone is anticipated between $50,000 and $53,000, making this range critical for the asset’s short-term stability.

From a technical analysis perspective, the Bitcoin price chart reveals a downward trend from mid-June to early July, following a period of high volatility with significant price swings. The primary support level identified is around $57,045, which has been tested multiple times, demonstrating its significance. 

On the resistance side, $73,794 marks the highest price point observed, with intermediate resistance levels around $69,000 and $64,000. These levels exhibited price consolidation before continuing the downtrend, indicating strong selling pressure.

As of press time, Bitcoin was trading at $54,098, reflecting a 7% decline in the last 24 hours. The 1-day RSI reading of 24.53 suggests the asset may be oversold and potentially poised for a rebound. However, the 1-day MACD trading below the signal line indicates further downward momentum in the short term.