Bitcoin (BTC) failed to break through the $31,500 resistance level and has since retreated to a range between $30,300 and $30,800 in the past few days. The cryptocurrency has also been unable to reclaim the $31,000 territory, leading some to believe that Bitcoin bears may still have the upper hand.
Despite recent signs of strength, Bitcoin’s inability to overcome key resistance levels has left many investors wary. The digital currency’s failure to break out of its current range suggests that it may be vulnerable to further losses in the short term.
Liquidity Grab Sends Bitcoin Tumbling
Bitcoin has been on a remarkable run since June 15th, gaining 25% in nine days. However, according to crypto analyst Justin Bennet, recent price action suggests a pullback may be in order.
BTC longs have piled into the rally, but as Bennet notes, Bitcoin doesn’t usually offer free rides for those late to the party. A pullback from current levels just above $30,000 would make sense, and the price action on the 8-hour time frame looks very similar to the April swing high.
Bitcoin closed above $30,400 on the 8-hour trend line in April, only to close below it within the next few candles. While BTC has held up better this time, the 4-hour time frame has already broken below $30,400. The next few 8-hour candles will confirm whether this breakdown is sustained.
If so, Bennet believes a pullback into the $28,000 area to flush out late BTC longs seems likely. How the Bitcoin price action develops at $27,000-$28,000 if and when tested will determine where BTC trends in July.
On the other hand, a sustained break above $31,000 would suggest that bulls remain in control and expose $32,500.
Nevertheless, despite the uncertain market conditions, the current uptrend in Bitcoin is far from over as long as bulls do not lose the $30,000 line.
Historical data suggests that if Bitcoin can consolidate and maintain this key level of support, there are many chances for it to continue to breach higher levels and mark new yearly highs.
Conversely, the $29,500 support level will be the next floor to watch if Bitcoin succumbs to bearish pressure. A downside movement could continue if BTC drops below this level, potentially leading to a further decline toward the $27,300 line.
Despite the potential downside risks, the Bitcoin market continues to receive positive news with the applications of Fidelity and Blackrock’s Spot Exchange-Traded Funds (ETF). The approval of these ETF applications could further boost the current price action and potentially lead to new yearly highs.
Bitcoin is currently trading at $30,600, representing a modest increase of 1.4% over the past 24 hours.
Featured image from Unsplash, chart from TradingView.com
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