Given that the price of Bitcoin has remained above the $17,000-$20,000 range over the past few weeks, Bitcoin’s sharp decline is over. The price is currently retesting the $23,000 resistance level after being rejected three times from the $20K support area.
Bitcoin advocates rejoiced
The market is flashing its first major recovery in at least a month, and crypto enthusiasts rejoiced to see the green on July 19 as months of “only down” price action finally came to a halt.
According to TradingView data, the breakout of Bitcoin (BTC) above the $23,000 resistance to reach the daily high of $23,447 – the first significant move above the 200-week moving average – is largely responsible for the renewed optimism.
The $23,000 level is also facing additional opposition from the 50-day moving average. Another retest of the $20K support level and possibly a deeper negative continuation is expected in this case as it looks as if these two points are currently refusing to move the price lower. Despite this, the bulls seem eager to grab the level.
BTC/USD barrels towards $24k. Source: TradingView
In order to assess the possibility of a negative reversal, price action on the lower time frames should be closely monitored over the next few days. A rally in the $30K supply zone is the next step, especially if there is an upside breakout above the $23,000-$24K range.
While many had expected a rally to the $30K region on average, many analysts were concerned that it might just be another fake pump.
Weekly candle close above $22,800
Rekt Capital, Cryptocurrency Analyst, Spread The following chart with the comment that “For the first time in weeks, BTC is making a decent effort to try to reclaim the 200 week EMA as support.” The analyst was paying close attention to a return above the 200-week moving average.
In recent weeks, the 200-week moving average has received a lot of attention because it has traditionally acted as a reliable bear market indicator that gave insight into when the bottom was set.
As per Rekt Capital,
“BTC needs a weekly candlestick close above $22,800 to confirm the recovery of the 200-week moving average as support.”
The miners entered the stage of surrender, and began to slightly distribute their holdings. Bitcoin’s hash rate was on a slight contraction after a new all-time high during the previous tremor, showing the same behavior.
Within 24 hours, cryptocurrency miners removed up to 14,000 bitcoins, each worth $300 million, from their wallets.
Due to the recent drop in the value of many digital currencies, miners have sold their bitcoin holdings.
This slight drop in the hash rate is expected given that the price of Bitcoin is currently around 74% below its all-time high and mining may not be profitable for many miners and pools. But despite the magnitude of the current price correction, the hash rate is still doing fairly well. In the past, the final stage of a bear market was determined by miners’ capitulation. Therefore, there is a strong possibility that Bitcoin will soon reach its long-term bottom and start a new bullish trend towards higher price levels.
Featured image from iStock Photo, charts from TradingView.com and CryptoQuant