Bitcoin Rejects Downside At $29k, Here’s Why This Is Good
Today’s Bitcoin price analysis is positive, as a dip to $29,000 was met with solid support and rejection, indicating that additional downside is unlikely. As a result, BTC/USD is expected to rise further in the next days, most likely above the $31,000 resistance level.
Naturally, the psychological price of $30,000 for Bitcoin implies a solid purchase zone. We’ll look at why Bitcoin’s recent consolidation around $30,000 is a promising sign of future price increases.
Bitcoin Fall 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 decrease. As a result of the decreasing prices, a snowball effect began to occur, causing other crypto projects to be hit and sink even more.
The price range of $30,000 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.
BTC/USD 1-day chart showing the consolidation area. Source: TradingView
For more than 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, signaling a clear consolidation region that must be overcome before the market can continue to develop.
The previous high was set at the same level as the previous low, signaling market hesitation. As a result, the recent $29,000 test could lead to another retest of the resistance.
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Will Consolidation occur?
If BTC prices happen to drop below $28,000 again, the next support area would be around $20,000. However, it is more likely that prices will increase from this Bitcoin price consolidation phase. The first target is around $35,000, or a 17% increase in prices. After that, prices should target the next psychological price of $40,000. From there, we might see a slight adjustment lower, but in the long term, prices should break higher. This would mark the official start of the uptrend.
In order for bitcoin’s price to establish a foothold at the bottom in the short term, according to Josh Olszewicz, head of research at investment management Valkyrie, volatility must reduce.
“We can look at things like the 200-week moving average, which is around $22,000. We can look at realized price, which is the average price of coins that have moved on-chain, which is around $23,800,” Olszewicz said on CoinDesk TV’s “First Mover” program. “This [movement to hit bottom] will probably take at least all of Q3, perhaps Q4 as well, if it were to happen this year.”
Other variables, like as the US Federal Reserve boosting interest rates, are also influencing bitcoin’s market performance, according to Olszewicz.
He speculated that institutional investors may be in the forefront of the downturn. 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.
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Featured image from iStock photo, chart from TradingView.com