Bitcoin broke above $21,000 resistance and appears poised to continue its gains. After relentless selling pressure, Bitcoin recorded its first week of green and reached a low point around $17,000 over the past year.
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Bitcoin (BTC), currently trading at $21,700, has a profit of 5% and 12% in the past 24 hours and seven days respectively.
Data from Material Indicators (MI) shows an increase in bid orders for BTC’s price as it moves to $22,000. Bid orders for cryptocurrency total around $10,000,000 at $21,800, $21,500 and $21,500.
These levels, which were not protected in the past and are susceptible to future downside as shown below. In lower timeframes, it seems as if investors have been forming a liquidity shield for BTC’s price at its current levels.
BTC whales have been buying more Bitcoin, which preceded the current bullish price action. MI data shows these large entities have been buying more Bitcoin since the start of July and influenced BTC’s price to the upside.
The data shows a slight decrease in the buying pressure, which could indicate BTC’s price will return to a consolidation phase. In order to sustain the bullish momentum, analysts from Material Indicators claimed BTC’s price must stay above $20,000 for the next two days.
The cryptocurrency must also reclaim its 200 Weekly Moving Average (WMA), currently at $22,560, in order to increase bullish momentum. Analyst Michaël Van de Poppe concursConsider possible price consolidation prior to any attempts at reclaiming higher levels.
As we speak, #Bitcoin is facing a crucial resistance. (Volume has to do with the fact that Binance has added the zero trading fees) Looking good overall but wouldn’t be surprised with some slight consolidation before a big breakout occurs.
How can a fresh Bitcoin rally be stopped?
According to economist Alex Krüger, the U.S. Federal Reserve (Fed) is still the most important headwind for BTC’s price. Inflation has been slowed down by the Federal Reserve (Fed) raising interest rates.
But, the Fed thinks any possible negative effects from an interest rate increase or decrease of its balance sheet is already priced into Quantitative Tightening. Thus, why the potential for future downside has been potentially reduced, Krüger said:
The Fed will not increase inflation unless there is a significant upside to them. Monetary policy tightening, however, is almost always in the price. QT won’t destroy markets. Major movements require an information shock which leads to equilibrium shifting.
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The next major obstacle to BTC’s price could be the traditional companies’ earnings season. The already closely correlated crypto market may follow if stocks fall due to an economic slowdown.