Levels immediately below the current $23,000 need to hold at the weekly close for Bitcoin bulls to breathe easy, commentators warn.
Bitcoin (BTC) recovered above $23,000 into July 22 as attention increasingly focused on the upcoming weekly close.BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
The pair traded in a critical zone for bulls on the day, with the 50-day and 200-week moving averages (MAs) still yet to flip from resistance to support.
Analysts were holding out for the weekly candle close to determine the strength of Bitcoin’s latest uptrend which at one point delivered weekly gains of up to 25%.
“To perform a reclaim of the 200-week MA as support, $BTC needs to Weekly Close above $22800,” popular trader and analyst Rekt Capital wrote in part of a recent Twitter update.
For fellow trader Jibon, meanwhile, $22,400 was more important as a minimum level to close out the week.
“Next Week Decision Time, $BTC will go 30-40K or 12-15K. I Want Weekly Close above $22,401,” he told Twitter followers on the day.
While sticking by his forecast of the relief rally going as high as $40,000 before another macro low sets in, Jibon acknowledged that Bitcoin was “still in a bear market” which would last into 2023.
“So All bullish trends are temporary moves,” he explained while debating the forecast.
In its latest market update released on the day, trading firm QCP Capital voiced reservations about the near-term potential for either Bitcoin or altcoins to rise much higher.
“In terms of spot direction, we are not sure if the upside momentum continues in a big way,” researchers wrote.
“The speed of this move higher felt positioning-driven (market was caught short) and the market is starting to show some signs of exhaustion.”
QCP pointed to the upcoming meeting of the United States Federal Reserve’s Federal Open Markets Committee (FOMC) on July 27 as a major volatility event to come.
Markets, it added, were now pricing in a 75-basis-point hike in key interest rates this month, rather than the higher 100-basis-point option feared on the back of the inflation numbers.
“Since the high CPI print, the market has been decisively pricing out the probability of a 100bps hike in the July FOMC,” the update read.
“Currently, a 20% chance of 100bps is still being priced in but our view is that 75bps is the most the Fed will do. So expect another boost as 100 bps gets completely priced out.”
As the U.S. dollar index (DXY) consolidated below twenty-year highs, meanwhile, analysts were waiting for a long-term parabolic uptrend to show signs of cracking.
USD, as Cointelegraph continues to report, remains distinctly inversely correlated with cryptoasset performance.
“It will be a good day when this finally breaks,” popular commentator Rickus summarized about the impact of a weaker dollar on risk assets.
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