Bitcoin Price Consolidates Above the Key Support Level

FXOpen

On 16 May, we analysed the long-term BTC/USD chart and created a "roadmap" for Bitcoin's price. This roadmap featured an expanding fan pattern, with the median line and support levels below it, and resistance levels above it.

Analysing the BTC/USD chart on 4 July, we noted:

  • A bearish break below the 1 May low was a potential threat.
  • The price could find support at the psychological level of $55k and the Support 3 line, which is part of the previously constructed roadmap.

How Has the Market Situation Changed Since Last Week?

As the current BTC/USD chart shows:

  • Bitcoin's price fell below the 1 May low.
  • It found support at the Support 3 line, reinforced by the psychological level of $55k.
  • The grey line is acting as local resistance.
  • The convergence of these lines is compressing Bitcoin's price into a consolidation zone.

Bearish sentiment was intensified by the increase in Bitcoin supply from wallets associated with the collapsed exchange Mt. Gox and German government organisations.

What’s Next?

An analysis of fund flows related to Bitcoin ETFs indicates that on Monday (yesterday), there was an inflow of around $300 million, marking the highest buying activity since early June.

For example, market leader BlackRock IBIT led in buying activity with a net inflow of nearly $180 million in one day. Could it be that investors are using the drop to $55k to "buy the dip"?

It's possible that investor inflows could result in a bullish breakout from the consolidation zone.

In a negative scenario, a break below Support 3 would pave the way for BTC/USD to test the psychological level of $50k.

FXOpen offers the world's most popular cryptocurrency CFDs*, including Bitcoin and Ethereum. Floating spreads, 1:2 leverage — at your service. Open your trading account now or learn more about crypto CFD trading with FXOpen.

*At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules respectively. They are not available for trading by Retail clients.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Stay ahead of the market!

Subscribe now to our mailing list and receive the latest market news and insights delivered directly to your inbox.

Latest articles

What Is a Global Macro Strategy, and How Do Traders Use It in Trading?
Trader’s Tools

What Is a Global Macro Strategy, and How Do Traders Use It in Trading?

A global macro strategy is a comprehensive investment and trading approach that includes analysis of economic, political, and global trends to make decisions. This article delves into the core components, analytical tools, and practical applications of global macro strategy, providing

Commodity Currencies in Stable Ranges: Should We Expect a Breakout?
Forex Analysis

Commodity Currencies in Stable Ranges: Should We Expect a Breakout?

The currency pairs AUD/USD and USD/CAD, unlike the pairs with the Euro, Yen, and Sterling, continue to demonstrate long-term stability. These pairs have been trading in narrow price corridors for several months. Given the weakening of the dollar

Commodities

Analysis of XAU/USD: Gold Price Sets Historical Record

As the XAU/USD chart shows, on 16th July, the gold price rose above $2460 for the first time in history. The bullish sentiment is driven by:

→ Anticipation of Fed rate cuts, as the appeal of non-yielding bullion generally increases

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.