Bitcoin Rejects $29k Downside, Here’s Why This Is Good


Today’s Bitcoin price analysis is positive as a drop to $29,000 was met with strong support and rejection, indicating a further drop is unlikely. As a result, BTC/USD is expected to rise further in the coming days, most likely above the $31,000 resistance level.

Naturally, the psychological price of $30,000 per Bitcoin implies a strong buy zone. We will see why Bitcoin’s recent consolidation around $30,000 is a promising sign of future price increases.

Bitcoin drops 57% from ATH

Bitcoin prices have fallen from a high of $69,600 to a current level of $29,350. The entire cryptocurrency market was destroyed by this 57 percent price decline. As a result of the price decline, a snowball effect began to take place, causing other crypto projects to take a hit and sink further.

The $30,000 price range for Bitcoin is critical. Many large corporations bought Bitcoins at that price. Furthermore, as shown in Figure 2, Bitcoin prices historically consolidated around those precise positions before beginning an advance.

Bitcoin

BTC/USD 1-day chart showing the consolidation area. Source: TradingView

For over a week, bitcoin has been trading sideways, with the $31,000 mark acting as solid resistance. Meanwhile, significant support has been established at $29,000, indicating a clear consolidation region that needs to be overcome before the market can continue to develop.

The previous high was set at the same level as the previous low, indicating market hesitation. As a result, the recent test of $29,000 could lead to another retest of resistance.

Related Reading | Eight consecutive red closes: Is Bitcoin headed for a recovery?

Will consolidation occur?

If BTC prices drop below $28,000 again, the next support area would be around $20,000. However, prices are more likely to rise from this phase of Bitcoin price consolidation. The first target is around $35,000, or a 17% increase in prices. After that, prices should point to the next psychological price of $40,000. From there, we could see a slight downward adjustment, but in the longer term, prices should break higher. This would mark the official start of the uptrend.

For the bitcoin price to establish a foothold at the bottom in the short term, according to Josh Olszewicz, head of research at investment management Valkyrie, volatility needs to be reduced.

“We can see things like the 200-week moving average, which is around $22,000. We can see the realized price, which is the average price of coins that have moved on the chain, which is around $23,800,” Olszewicz said on CoinDesk TV’s “First Mover” show. “East [movement to hit bottom] It will probably take at least all of the third quarter, maybe the fourth quarter as well, if it happens this year.”

Other variables, such as rising interest rates from the US Federal Reserve, also influence the performance of the bitcoin market, according to Olszewicz.

He speculated that institutional investors may be at the forefront of the recession. The average size of on-chain transactions, according to Olszewicz, is in the tens of thousands of BTC.

Nonetheless, according to Olszewicz, ordinary traders continue to influence market movement more than institutional investors. Those learning about cryptocurrencies are now jumping in during this bear market to “test the waters” and “see if they can survive,” according to him.

Suggested Reading | Ripple (XRP) sinks to $0.43 with bears in full swing

Featured image from iStock photo, chart from TradingView.com

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