Considering that the bitcoin price has been holding above the $17K-$20K range over the past few weeks, the sharp decline of bitcoin has come to an end. After getting rejected thrice from the $20K support area, the price is currently retesting the $23K resistance area.
bitcoin advocates rejoice
The market showed its first significant relief rally in at least a month, and crypto enthusiasts rejoiced at the sight of the green on July 19 as months of “just down” price action finally closed.
According to data from TradingView, bitcoin[BTC]The break above the $23,000 resistance and a daily high of $23,447 – the first commendable move above the 200-week SMA – is largely attributable to the renewed optimism.
The $23K level is also facing additional resistance from the 50-day SMA. In this case another retest of the $20K support level and perhaps a deeper downside continuation is expected as these two points seem to be rejecting the price downside at the moment. However, the bulls are eager to seize the level.
BTC/USD barrels towards $24k. Source: TradingView
Price action on the lower time frame should be closely monitored over the next few days to assess the likelihood of a downside reversal. A rally to the $30K supply zone is the next step, especially if a bullish breakout occurs above the $23K-$24K range.
While many have predicted a rise to the mid-$30,000 region, many analysts have expressed concern that this could be just another fake pump.
“Weekly candle closed above $22,800”
Reckitt Capital, a cryptocurrency analyst, deployment of The following chart comments that “For the first time in weeks, BTC is making a decent effort to retest the 200-Week MA as support.” The analyst is closely watching a move above the 200-week MA.
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In recent weeks, the 200-week MA has attracted a lot of attention as it has traditionally served as a reliable bear market indicator that has given insight into when a bottom is set.
According to Rect Capital,
“BTC needs to close the weekly candle above $22800 for successful confirmation of retesting the 200-week MA as support.”
miners surrender
Miners have entered the capitulation phase, who have started to distribute some of their holdings. After a new all-time high during the last shakeout, bitcoin’s hash rate declined marginally, exhibiting the same behavior.
Within a 24-hour period, cryptocurrency miners removed 14,000 bitcoins, each worth $300 million, from their wallets.
Due to the recent decline in the value of many digital currencies, miners sold their bitcoin holdings.
Source: CryptoQuant
This slight drop in hash rate is expected, as the price of bitcoin is currently down around 74% from its all-time high and mining may not be profitable for many miners and pools. But despite the size of the current price correction, the hash rate is still doing quite well. In the past, the final phase of a bear market has been identified by the capitulation of miners. Therefore, there is a strong possibility that bitcoin will soon reach 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