The price of BTC soared above a significant cluster of resistance, but the economic structure with technical analysis indicates that the advance is merely another trap.
On July 28, after a nearly 10.5 percent rise that started the previous day, the price of bitcoin (BTC) surged toward $24,200.
Jerome Powell, the chairman of the Federal Reserve, indicated intentions to halt the Fed’s ongoing tightening cycle, which led to the gains. This led several Bitcoin analysts to forecast a short-term bullish continuation; under the alias CryptoHamster, one such analyst predicted that BTC would reach $26,000 next.
Bitcoin’s Bullish Behavior Can Be A Rebound:
In November 2022, Bitcoin reached a record high of $69,000. Ever since, the crypto has lost more than 60% of its value while experiencing multiple mini-pump-ups along the road.
Since November 2021, there have been at least five recoveries on the daily chart for Bitcoin, each of which resulted in increases of between 23 and 40 percent. However, each time a local price top formed around its exponentially weighted moving averages (EMA) and subsequently dropped to new yearly lows, it continued its correction.
This instance appears to be the same, with Bitcoin experiencing a bullish refusal in June and then recovering by about 17% a couple of months later. Notably, the 50-day EMA (the red wave) of the BTC price serves as temporary resistance at roughly $23,150, with a breakthrough clearing the road toward $27,000, which corresponds with the 100-day EMA (black).
The price at $27,000 would still represent a lesser high than earlier local highs. Technically speaking, that increases the likelihood of some other bearish resumption move.
Interestingly, volume activity during the current Bitcoin drop indicates a stronger desire to sell the coin at regional peaks.
