With the price of Bitcoin holding above the $17K-$20K range over the past few weeks, Bitcoin’s sharp decline has come to an end. The price is currently retesting the $23K resistance level after bouncing three times from the $20K support area.
Bitcoin supporters rejoice
The market posted its first significant rally in at least a month, and cryptocurrency enthusiasts rejoiced to see the green on July 19 as months of “only down” price movement finally came to an end.
Bitcoin (BTC)’s break through the $23,000 resistance and reaching a daily high of $23,447 – its first notable move above the 200-week moving average – is largely responsible for the new optimism, according to TradingView data.
The $23k level is also experiencing additional resistance from the 50-day moving average. In this situation, further retesting of the $20k support level and possibly a deeper negative continuation is expected because these two points seem to be rejecting the price move down for the time being. However, the bulls seem to be looking to capture this level.
BTC/USD barrels towards $24k. Source: TradingView
To assess the likelihood of a negative reversal, you should carefully monitor the price action on lower time frames over the next few days. The next move would be a rally into the $30K supply zone, especially if there is a bullish break above the $23K-$24K range.
While many predicted a rise to the mid-$30,000 range, some analysts have raised concerns that this could just be another phony pump.
“Weekly Candle Closes Above $22,800”
Rekt Capital, Cryptocurrency Analyst, published the following chart with the comment: “For the first time in weeks, BTC is making a decent effort to try and bring back the 200-week moving average as support.” The analyst is closely watching the move above the 200-week moving average.
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The 200-week moving average has received a lot of attention in recent weeks as it has traditionally acted as a reliable indicator of a bear market that gave an indication of when a bottom was set.
According to Rekt Capital,
“BTC needs to close the weekly candle above $22,800 to successfully confirm the return of the 200-week MA as support.”
The miners capitulate
Miners entered the capitulation phase and began to distribute their assets little by little. The Bitcoin hash rate was in a minor decline after a new all-time high during the previous shakeout, showing the same behavior.
Within 24 hours, cryptocurrency miners removed up to 14,000 bitcoins from their wallets, each worth $300 million.
Due to the recent decline in the value of many digital currencies, miners have sold their bitcoin holdings.
This slight drop in hash rate is expected given that the price of Bitcoin is currently about 74% below its all-time high and that mining may not be profitable for many miners and pools. But despite the size of the current price correction, the hash rate still performs quite well. In the past, the final phase of a bear market was determined by the capitulation of the miners. Therefore, there is a strong possibility that bitcoin will soon hit its long-term bottom and start a new uptrend towards higher price levels.
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Featured image from iStock Photo, charts from TradingView.com and CryptoQuant
Credit : www.newsbtc.com