Given that the price of Bitcoin has been lingering above the $17K–$20K range over the past few weeks, Bitcoin’s sharp downturn has come to an end. The price is currently retesting the $23K resistance level after being rejected three times from the $20K support area.
Bitcoin Advocates Rejoice
The market flashed its first significant relief rally in at least a month, and crypto enthusiasts rejoiced at the sight of green on July 19 as the months of “down only” price action finally came to a stop.
According to TradingView data, Bitcoin’s (BTC) breakthrough over resistance at $23,000 to reach a daily high of $23,447—its first appreciable move above the 200-week moving average—is largely responsible for the renewed optimism.
The $23K level is also experiencing extra opposition from the 50-day moving average. A further retest of the $20K support level and perhaps a deeper negative continuation are anticipated in this situation because it appears as though these two points are currently rejecting the price’s move downward. The bulls, though, seem keen to seize the level.
BTC/USD barrels towards $24k. Source: TradingView
In order to assess the likelihood of a negative reversal, the price action on the lower timeframes should be closely monitored throughout the course of the following few days. A rally into the $30K supply zone is the next move, especially if a bullish breakthrough happens above the $23K-$24K range.
While many have predicted a rise to the mid-$30,000 area, several analysts have expressed concern that it might just be another fakeout pump.
“Weekly Candle Close Above $22,800”
Rekt Capital, a cryptocurrency analyst, posted the following chart with the comment that “For the first time in weeks, BTC is putting in a decent effort to try to reclaim the 200-week MA as support.” The analyst has been paying close attention to the move back above the 200-week MA.
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In recent weeks, the 200-week MA has received a lot of attention since it has traditionally acted as a dependable bear market indicator that has given insight into when a bottom has been set.
As per Rekt Capital,
“BTC needs to Weekly Candle Close above $22800 to successfully confirm a reclaim of the 200-week MA as support.”
Miners Capitulate
Miners have entered the capitulation phase, who have started to slightly distribute their holdings. The hashrate of Bitcoin has been in a minor downturn following a new all-time high during the previous shakeout, exhibiting the same behavior.
Within a 24-hour period, cryptocurrency miners removed up to 14,000 bitcoin, 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 minor fall in the hashrate is expected given that Bitcoin’s price is currently approximately 74% off its all-time high and that mining may not be profitable for many miners and pools. But despite the current price correction’s size, the hashrate is still doing fairly well. In the past, the bear market’s ultimate phase has been identified by the capitulation of the miners. Therefore, there is a strong likelihood that Bitcoin will soon reach its long-term bottom and start a fresh uptrend toward higher price levels.
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Featured image from iStock Photo, charts from TradingView.com and CryptoQuant
