Bitcoin Tries To Flip $20k Support, But Technicals Are Keeping It Back
Bitcoin Tries To Flip $20k Support, But Technicals Are Keeping It BackATZCrypto - Latest Bitcoin, Ethereum, Crypto News & Price Analysis Bitcoin is trading at around one-third of its November 2021 ATH, but pressures from within crypto itself continue...
Bitcoin crypto has shown what appears to be a bullish pattern, which suggests an unexpected rally by the largest crypto asset. Analysts on crypto Twitter explain how economic factors and decisions by policymakers could propel BTC prices despite the recession.
Bitcoin may have found a bottom
Some analysts evaluated the potential for BTC prices to hit bottom at $19,600 before the reversal of a bullish trend. Per the analysts, this prepares the leading crypto for a bullish rally to $48,000. Noteworthy, the Bitcoin Fear and Greed Index explored a market sentiment indicator for BTC, turning from fear to neutral on July 30.
Other analysts present a conflicting opinion, with Cici Lu, the CEO of Venn Link Partners, suggesting to Bloomberg that the Bitcoin market may have found a bottom. According to Lu, liquidation of leveraged position appears to be over.
In contrasting opinions, Joe DiPasquale, the CEO of BitBull Capital, focuses on Bitcoin’s monthly close, observing that the leading cryptocurrency retested support levels between the $19,000 and $20,000 levels. According to DiPasquale, successful bounces from this range would potentially offer bulls a firm base to sprint yet another rally.
Analysts from FXStreet, however, present a contrasting view on BTC, which draws from the belief that spot buyers may be in a compromising position. The analysts have speculated a bearish target for the price of BTC.
Bitcoin Price Analysis
In late July, the Bitcoin price declined significantly under the $22,800 support zone, displaying a steep bearish wave before the price nosedived under the $21,500 support zone (chart below). While the decline was happening, the people’s crypto again made a break below a key bullish trendline establishing support close to the $20,850 zone on the daily chart of the BTC/USD pair.
Analysts at Cointelegraph say BTC is due for one of the most significant bull markets following July’s 20%gain circle. According to Mike McGlone from Bloomberg’s Intelligence, Bitcoin’s price in the coming times could be more bullish than seen on short-term charts.
More on Bitcoin news, BTC hoaxed a breakout to record new six-week highs into July 31 as the clash approached the weekly and monthly close to the month’s end. Data from Cointelegraph Market Pro and TradingView reveal that BTC/USD canceled out all the gains achieved during the weekend, from $24,670 to $23,555.
Bitcoin /US Dollar 1-Day Technical Chart
However, Rekt Capital has not indicated whether the next weekly candle close can prove that BTC had reset a key support trendline following weeks of negative sentiment. The trader and analyst wrote in a Twitter post, “Looks like BTC has successfully retested the 200-week MA as support.”
The current market strength does not look like it has more room to proceed. In a weekend Twitter post by Material Scientist, he explores funding rates on derivatives platforms becoming progressively positive. This shows complete agreement that prices may surge unchecked. Material Scientist is the creator of Material indicators, an on-chain analytics resource.
An excerpt from Material Scientist’s report reads, “Negative funding has almost completely reestablished, similar to the case witnessed in late March. With this, we may even witness positive funding on some altcoins soon.”
However, other perspectives disregard the possibility of a new correction in the short term. Focusing on the potential performance during the last quarter of 2022, Mike McGlone speculated clearly about BTC’s future performance. Mike serves Bloomberg Intelligence as a senior commodity strategist.
The Feds’ decision for a sustained rate hike
According to Fed chair Jerome Powell, the Feds will address the rate hike systematically, which may hinge on Bitcoin to restore its tendency to set the pace for most asset classes.
Analysts at CoinDesk have predicted BTC prices, speculating a 5.71% increase to hit $24,745 by August 6. Per their technical indicators, however, the current sentiment remains bearish, citing the Fear & Greed Index score at 33 (Fear).
Bitcoin: Technicals hold it back
Bitcoin registered 14/30 in green days (equivalent to 47%) against 6.71% price volatility over the last month. Per this analysis, now would be the wrong time to buy the flagship crypto.
Why Bitcoin is struggling to flip $20K Support
The positive gains achieved within the first ten days of July vanished on July 13. This happened as Bitcoin (BTC) and the entire crypto market pulled back close to new yearly lows.
Multiple factors explain the subdued action witnessed in the market. Among them is the current record-high Consumer Price Index publication. Also, an aggressive USD that recorded its highest level since October 2002 only recently.
Cointelegraph Markets Pro and TradingView data reveal consecutive days of BTC price headed south, to hit an intra-day low at the $23,137 level after the recorded deterioration of key stock market indices.
Wash trading inspired the latest Bitcoin surge.
The increase in BTC prices over the past week had inspired some hope among specific traders. However, the hope is likely to disappear in the short term. According to data from Arcane Research, most of the momentum that sparked Bitcoin’s surge resulted from the Binance crypto exchange’s decision to terminate trading fees for some BTC pairs.
Per the research, following the removal of trading fees, the exchange recorded a surge in trading volumes, which is owed to “wash trading among traders looking to take advantage of the absence of fees to score higher fee margins.”
Nonetheless, the entire cryptocurrency exchange ecosystem shows that activity remains weak. This indicates that currently, there is reduced interest in buying cryptocurrencies.
An excerpt from Arcane Research read, “Every other crypto exchange witnessed muted trading volume in the past week, while the seven-day average trading volume recording near one-year lows. This shows that the organic trading activity within the market is currently muted.”
Increased fear of buying Bitcoin
The Crypto Fear and Greed Index also shows diminished interest in buying Bitcoin. It currently displays a “record-long 68-day streak” within the highly fearful region.
As indicated by Arcane research, the hike to a 24 score on July 10 was majorly triggered by Binance’s decision to withdraw trading fees on four trading pairs, “leading the metric to overstate the fearfulness seen in the present market sentiment.”
The hype on the Binance crypto exchange’s decision to waiver trading fees for trading Bitcoin first subsided. Trading volumes then normalized. This was evidenced by the descending back of both the Fear and Greed indices to the extreme fear region.
More evidence of this is visible in Exchange outflows that reflect the actual state of the market. After hits such as Three Arrows Capital liquidating and freezing funds from crypto platforms like Celsius, users started removing their BTC assets from exchanges with the highest rate on July 26.
Beginning 2020, the rate of Bitcoin outflows from exchanges is far higher than the rate of Bitcoin inflows. The steepest difference happened between June and July this year. On June 26, 2022, the crypto market witnessed the largest BTC outflow. It recorded 153K with Bitcoin sprinting to leave centralized exchanges. This was worth almost $3.2 billion pic.twitter.com/FQp2E2YkSw.
Leveraged liquidity surges over $25K
Researchers at Jarvis Labs provide the last scoop of insight to explain why Bitcoin remains in the current trading range. These researchers give a chart that shows the dark liquidity bands existing below $18,000 and above $25,000.
The chart shows the display of highly leveraged liquidity. This prompted the possibility that BTC could attempt the $25,000 and bar any unexpected negative changes in the process. According to Jarvis Labs, “The caveat here is that BTC’s price approaches such a level. The market needs to be protected from skeletons, lest more compelled selling be triggered.”
We are yet to see whether BTC prices will move. Bitcoin traders must watch for increased volatility over the next few months. This is amid the increased global tensions, surging inflation rates, and growing pessimism. These facts imply that a bear market will extend to cryptocurrency and international markets.
World’s First Multi-Token ISPO — By Genius X - Starts on 12th of September, epoch 363!
Genius X, a revolutionary launchpad and business accelerator helping Web3 startups attain speed, scale, and edge, is thrilled to announce the world’s first Multi-Token ISPO.I WANT TO KNOW MORE!