Bitcoin (BTC), the world’s largest cryptocurrency, has experienced a sharp decline recently, mirroring the broader decline in the cryptocurrency market.
This has led to concerns among Bitcoin bulls, who closely monitor the cryptocurrency’s price movements to determine whether the decline will continue or stabilize the market.
Downside Volatility Threatens BTC’s Support
According to crypto analyst Rekt Capital, Bitcoin is hovering below a critical support level of $29,250. This is a crucial threshold for Bitcoin bulls, as a sustained breach of this level could trigger a macro trend shift and lead to a retest of lower support lines.
Rekt Capital notes that Bitcoin has over a week to continue holding this support level, with the July Monthly Candle Close as an essential milestone. However, the analyst also warns that there is plenty of time for the market to shake out investors with downside volatility below this level potentially.
BTC currently trades at $29,000, with the $29,250 50-day Moving Average (MA) being momentarily lost. This aligns with Bitcoin’s squeeze momentum indicator, which points to a downtrend cycle. Historically, such cycles have resulted in a consolidation period of 15 to 30 days after a sharp decline like the one BTC experienced recently.
However, there is positive news for bulls as BTC’s Average Directional Index (ADX) indicator is spiking, suggesting a loss of momentum in the current downtrend.
Nonetheless, if the current downtrend persists, the only notable support lines would be at $28,200, $28,100, $27,200, and the 200-day MA, which is critical for Bitcoin’s long-term trend and currently at $26,800.
Bulls need to hold the 200-day MA, as losing it could compromise the current bullish trend.
Bitcoin On The Edge
On the other hand, the broader cryptocurrency market is under pressure ahead of Wednesday’s upcoming interest rate decision. However, according to the crypto trader known as The Wolf Of Few Streets, Bitcoin’s support levels at 28,800 and 28,300 should prevent a significant fall.
The trader believes that the Bitcoin market has already priced in the expected increase. Ideally, the market should bounce off one of these levels and test $32,000 again after the interest rate data is released on Wednesday.
Additionally, The Wolf Of Few Streets is optimistic about the positive news that may emerge regarding Exchange-Traded Funds (ETF) decisions, which could further support the market.
The trader sees no immediate negatives for BTC and believes that a minor liquidation of long positions has been long overdue, making the timing for a decline perfect. However, The Wolf Of Few Streets does not expect this decline to last long.
Overall, The Wolf Of Few Streets remains bullish on Bitcoin and believes the current market pressure is temporary. The trader’s analysis suggests that the support levels will hold, and positive news regarding ETF decisions could provide further support.
Featured image from iStock, chart from TradingView.com