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BTC Price Analysis: Nears a Period of Greater Volatility As Bitcoin’s Daily Trading Volume Hits 2021 All-Time Low

BTC
  • Converging technical limitations have kept prices broadly within the $42,000-$28,000 range
  • Narrowing price action has been noted since the price drop on May 19 on BTC to $30,000
  • Bitcoin’s daily trading volume has decreased to its lowest level since early 2021, indicating a phase of accumulation

At the time of this analysis, BTC’s price continues to tighten at $32,800 after a bounce from a $31,600 daily low. Over the last day, the overall crypto market capitalization has barely changed: up 0.22% to $1.340 trillion according to Coinmarketcap. However, during the last several days, there has been a tiny migration of capital from Altcoins (including Ethereum) to Bitcoin. This move is reversing a trend that began in April with a significant flood of capital into Altcoins, and it could signal the end of BTC’s bear market. On the daily chart, narrowing price action has been noted since the price drop on May 19 on BTC to $30,000. Converging technical limitations have kept prices broadly within the $42,000-$28,000 range. The scenario suggests that the price is nearing a time of increased volatility. According to the Wyckoff method, Bitcoin’s daily trading volume has decreased to its lowest level since early 2021, indicating a phase of accumulation. Although low volume activity precedes explosive moves, in Bitcoin’s case, a breakout in either direction is possible.

Key Levels
Resistance Levels: $45,000, $40,000, $35,000
Support Levels: $30,000, $25,000, $20,000

BTC/USD Daily Chart: Ranging

BTC/USD Daily Chart

BTC is trading within a narrow range on low volumes at the mid-week but remains positive above $30,000 psychological handle, where the pair is attempting to form a higher base. The last strong recovery rally from the prior month’s low of $28,800 peaked at $36,675. BTC now looks for a final push toward targets beyond $41,322 (June high) and $45,000 moving average (MA 200) zone, supported by bullish daily studies which are gaining fresh momentum.

On the contrary, bearishly aligned near-term technicals also support the downside scenario, with the moving average (MA 50) acting as a limiting barrier and the $35,000 resistance zone intact. Otherwise, the possibility of an upside surge could be expected on the loss of a $35,000 handle that would open next pivotal resistance at $40,000 followed by daily MA 200 at $45,000 and trigger further rallies on break.

BTC/USD 4-Hour Chart: Ranging

BTC/USD 4-Hour Chart

BTC has turned into sideways consolidation as observed on the 4-hour time frame since June 22 after hitting a $28,800 low. While its recovery continues, the weak upside momentum doesn’t warrant a breakout yet. Instead, the consolidation will likely extend further for a while. Nevertheless, most traders expect the BTC downside to be contained by $30,000 psychological support even in case of a deeper pullback.

A break of $30,000 will resume a larger downtrend to a projection of Jan 4th lows of $27,678 to Dec 21st, 2020 lows of $21,913. Though, the structure suggests that the ongoing consolidation may end up a corrective rise, which is in line with a market-wide bullish view. We’d expect the BTC downside to be limited by the $30,000 support to bring upside resumption in case of a plunge, sooner or later.

Note: Kryptomoney.com is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results

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