Bitcoin Rejected At $21K, Why A Retest Of The Lows Could Be Positive
Bitcoin seems on the verge of re-testing previous support levels.
The number one cryptocurrency has been experiencing a persistent
downside which took it to a multi-year low of around $17,000.
Related Reading | Two Months Of Extreme Fear Leaves Crypto In
Panic, Bitcoin At $20K Bitcoin has been trying to reclaim
previously lost territory, but the selling pressure continues
driven by negative news around the crypto space and the shift in
monetary policy from the U.S. Federal Reserve (Fed). At the time of
writing, BTC’s price trades at $20,000 with a 10% loss in the past
week. Analyst Michaël van de Poppe believes BTC’s Price remains in
a good position after it was rejected at $21,000. If the
cryptocurrency manages to hold above $20,000, there is potentially
more fuel for bullish continuation. Via Twitter, the analyst said:
Sweep of the lows and holding. As long as $20k holds, it should be
fine for a sweep of the previous high at $21K and then a higher
high at $23K and potentially $24K are doable. Longs still open.
Data provided by Material Indicators (MI) records some support for
Bitcoin below $20,000. This suggests the cryptocurrency could drop
below its current levels. However, there are around $30 million in
bids and orders for Bitcoin around $19,000. This area should
operate as critical support in case of further downside. If those
levels fail, there are still $40 million in bids orders between
$17,800 and $18,000 which could provide an extra layer of support.
The order book looks thin below these levels Above current price
levels, there are over $20 million in asks orders around $21,000
alone. This level will continue to be a major resistance area and
an obstacle for BTC’s price as it consolidates around the area. The
analyst at Material Indicators shared the following on the hurdles
standing between BTC and future appreciation: This is why we wait
for confirmations. Despite the sentiment and the #TradFi gains
yesterday, the rally lost momentum before it could test the 200
WMA. Now Fire Charts shows ~$60M in ask liquidity stacked between
here and the 200 WMA range. When Will Bitcoin Hit A Price Bottom?
In that sense, analysts from MI emphasized that it is impossible to
know with certainty when BTC will bottom. However, there are
certain clues that could help investors to identify a decline in
the bearish trend. Related Reading | Bitcoin Miner
Liquidations Threaten Bitcoin’s Recovery For example, BTC’s price
usually bottoms and then goes into a long period of consolidation.
The analyst stated via Twitter without ruling out another leg down:
the market is overdue for a rally, and the fact that moves to or
below the 200 WMA have historically led to Bull Markets, we can’t
validate that until price reclaims the key moving averages,
starting with the 200 Weekly MA.
Historical Stock Chart
From Jul 2022 to Aug 2022
Historical Stock Chart
From Aug 2021 to Aug 2022