Bitcoin has bounced back from a high area of around $20,000 and managed to break some important resistance on its bounce, it still faces many hurdles. At the time of writing, BTC trades at $34,129 with a 14.1% profit in the daily chart.
Despite the bounce, many argued that the conditions in the market remain intact. Thus, BTC’s price action could stay in the range it has been stuck in for the past 2 months approximately from the low $30,000 to its highs at around $39,000.
In support of this thesis, a CryptoQuant analyst claimed that Bitcoin broke its downtrend with a return to its current levels. However, the research firm believes this price action will be sustainable only in the short term. The report said:
BTC downtrend was broken and we are now trending sideways/upwards (in the short-term), meaning that we will possibly see the price action around 30k or below.
CryptoQuant also records a rise in stablecoins reserves across exchange platforms. Usually, this metric supports the perception of more bullish momentum in the short term, but the firm claims that these reserves are increasing due to the high BTC selling.
Therefore, they are unrelated to stablecoin inflows and could have little impact on the price action in the coming weeks. The analyst did an “on-chain for dummies” conclusion and explained that a rise in BTC inflows on centralized exchange tends to suggest a bearish trend, similar to a rise in stablecoins with BTC inflows.
Although Bitcoin’s recovery seems to be on the right track, the first cryptocurrency by market cap must flip $35,000 from resistance to support in the short term. If it fails, investors could see another leg down to the low $30,000, as CryptoQuant claims.
Bitcoin: Key Levels To Watch In The Coming Days
Bitcoin has been struggling to maintain its current levels and has been rejected several times in the mid-area. As Economist Michaël van de Poppe said, BTC’s price must take reclaim the $35,000 for more bullish continuation possibly intro $37,000 and $41,000, if it can sustain those prices.
Rejecting here means -> looking for a higher low to confirm bullish divergence. Levels to watch; $33K and $31.5K.
Senior Commodity Strategist for Bloomberg Intelligence, Mike McGlone, compared $30,000 with the $4,000 in 2019 and 2020. This level was key and was the most important support in Bitcoin’s most aggressive corrections. Thus, McGlone concluded:
Selling Bitcoin around good support & similar dips below most means as about $30K this year hasn’t ended well, and if the key question this time around is whether it’s different, we see a more-enduring bull market.
