After a spectacular first half of 2023, the price of Bitcoin (BTC) appears to have stalled out, being stuck between $29,000 and $31,500.
There could be reason to believe that in the near term, the price of Bitcoin will tend to trade sideways or to the downside. This thesis can be based on three factors, with two of them involving technical analysis and the third involving fundamentals.
Bitcoin price resistance at $32,000 has been holding strong
Charles Edwards, founder of Capriole Investments, recently released a market update in which he notes the significant resistance Bitcoin has failed to break through at the $31,000–$32,000 level:
“Bitcoin is trading into the most significant resistance on the chart, $32K. Despite a swath of positive news stories over the last month for the crypto industry; from the Blackrock ETF announcement, the XRP legal victory through to presidential candidate Kennedy stating he would back the US Dollar with Bitcoin today; nothing has helped Bitcoin sustain momentum above $31K.”
The report goes on to state that if positive news of this magnitude doesn’t translate into upward price momentum, this alone could be a bearish signal.
Analysts question whether Bitcoin’s $29,500 support will hold
While Bitcoin has not traded far below the $30,000 mark for almost a month, a lack of resistance beneath $29,500 indicates that a breakout to the downside from the current consolidation could lead to further decline.
As crypto market commentator Colin Talks Crypto has pointed out, the next major support levels for BTC/USD don’t kick in until somewhere around the $27,500 level. Not only does this level act as support based on previous price action, but both the 200-week moving average (MA) and the 200-day MA have begun to converge just beneath it.
#Bitcoin looks to have a fair chance of dropping to around $27.3k where there is a confluence of both:
1. a strong support range of previous price action (orange rectangle)
2. where the 200 weekly MA (pink) acts as support.
3. The 200 daily MA (blue) isn’t far behind either.… pic.twitter.com/aDHDMqvW7U— Colin Talks Crypto (@ColinTCrypto) July 19, 2023
For the past month, BTC/USD has been holding within a tight consolidation range. Support for this range appears around the $29,500 level. A daily close beneath support could open the path to a further move downward toward $27,500.
However, volumes have been declining, suggesting that perhaps the recent spike downward could be less bearish than it…
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