Will bitcoin’s sharp selloff stop this week?

The Bitcoin price is expected to skyrocket this week, as it struggles to sustain dominance at critical support levels. The selloff rally was gaining momentum, and the broader market sentiment has been fearful. However, some hope of a bullish reversal is starting to light up with lower price rejections and demand under the $56K level.

Bitcoin price is headed to the $50K psychological mark, with a drop of 11.85% in the last eight days. At the time of writing, the most famous cryptocurrency is trading at USD 56,372.70. The downfall breaks under the 50% Fibonacci level at the $56,310 mark with a bearish engulfing candle on Sunday.

The ongoing brawl at lower levels teases significant demand, hoping to absorb the incoming supply pressure. In the 4H BTC Price chart, dip formations reveal a bullish RSI divergence, bolstering the uptrend chances for Bitcoin.

The Bitcoin network hashrate drawdown has reached critical levels, indicating dips in mining power, which has reached levels last seen in December 2022. This metric reflects significant reductions in the network’s computing power, often due to increased mining difficulty or operational costs. Historically, deep hashrate drawdowns have correlated with major BTC price movements, suggesting current trends could signal another significant price shift.

Short liquidations are rising in the BTC price, with $91M worth of bearish positions exiting the market today. The Bitcoin rally is slowly but surely picking up pace today.

In the ongoing bearish run, the BTC price struggles to sustain recovery phases due to the immense overhead supply. While the payout from Mt.GOX has the potential to bring massive supply, the underlying demand is fighting back against the FUD rally.

With multiple bullish signals arising in the price chart, derivatives market, and on-chain data, Bitcoin seems bound for a moonshot. In a bearish scenario, the BTC price could test the $52K support for a moment, but the recovery in Bitcoin could result in a surge back to the $60,000 this week.