Bitcoin Approaches Crucial Support: Here’s Why Holding $56,000 is Extremely Important for the BTC Price Rally

The recent pullback slashed the market capitalization below $2 trillion, which has not yet recovered. Meanwhile, the Bitcoin price fails to reclaim the crucial levels, circulating bearish waves across the markets. The token got rejected by the 20 EMA, while the CME gap below remains unfilled. Does this suggest that the BTC bulls have lost the ground? Will this negatively impact the Bitcoin price rally?

The price acceleration halted significantly in the past 85 days; however, it is getting increasingly closer to fully resynchronizing with traditional halving cycles. The token is casually putting in its first higher low in almost 200 days. In the coming days, one can expect more volatility as there are potential rate cuts while the fear & greed index continues to remain neutral at the moment. Therefore, the bottom signals are flying left and right, indicating more bearish action could be in play. 

The short-term price action of Bitcoin suggests the token is preparing to rise above the pivotal resistance between $57,200 and $57,400. The supertrend remains positive while the Ichimoku cloud is heading towards a bullish crossover. Therefore, one can expect a rise beyond $57,600 in a short while now, which may push the price close to $59,000. However, the bulls are required to remain vigilant as the market dynamics do not appear to be completely in favour of the bulls. 

The spot BTC ETF witnessed a positive day after recording constant negative flows for over a week. The first inflow for Bitcoin in two full weeks suggests that there were no outflows as the day’s trade ended with a decent move. Hence, if these inflows start ramping up again, then the Bitcoin (BTC) price is believed to revamp a fine ascending trend. However, the Bitcoin trading volume has surged magnificently in the first eight months, which has surpassed the volume seen during the 2021 bull run. 

Therefore, the bullish hopes of rising above $60,000 continue to surge regardless of the misty clouds hovering above the crypto markets.