Bitcoin may have a price correction again.

ฺBotcoin has been trading in the range of $29,000 to $30,000 for a long time, but just a few days ago, the price of Bitcoin surged rapidly to a new high of over $31,800 in the current year. This surge was driven by factors such as a rapidly decreasing inflation rate and the potential approval of ETFs in the United States, as well as Ripple's (XRP) victory in its legal battle with the U.S. Securities and Exchange Commission over XRP's classification.

However, yesterday, Bitcoin experienced another downward correction, falling below $30,000 once again. Glassnode's reports have shown that the price movements of Bitcoin in the first half of 2023 were primarily driven by short-term investors, with up to 88% of them profiting from the price surge after BTC surpassed $25,000 due to the filing of BlackRock's ETF. This was in line with expectations that there would be selling pressure to take profits around $31,000.

Despite the upward surge in the first half of 2023 and short-term investor selling, there hasn't been significant selling pressure from long-term investors. This suggests that long-term investors still see the market in an upward trajectory, but the recent selling pressure can indicate the risk of another base adjustment for Bitcoin.

Additionally, the upcoming Bitcoin Halving is another significant factor that may contribute to another price surge. The Halving event reduces the mining reward by half, and the stock-to-flow (S2F) model by PlanB suggests that the scarcity of Bitcoin increases its value over time.

In the short term, some analysts still believe that the price of Bitcoin may remain in a sideways trend or even turn bearish. They see strong resistance around $32,000 for Bitcoin. Charles Edwards, the founder of Capriole Investments, has expressed his opinion that Bitcoin is trading at a critical resistance level, and despite the positive news in the crypto industry, such as the announcement of Blackrock ETF and the legal victory of XRP, it's challenging for Bitcoin to sustain its momentum above $31,000.

Moreover, the trading volume of Bitcoin has started to decline, indicating that apart from short-term investors taking profits, there is little buying activity. This raises concerns that the support level at $29,000 might not hold, and Bitcoin could potentially drop back to $27,500.

Techical analysis data (5H)

Resistance: 30342.0, 30454.0, 30648.0

Support: 30036.0, 29842.0, 29730.0

Source: Investing.com

Pivot Points June July 20, 2023 03:36 PM GMT+7

Buy/Long 1: If there is a touch of support in the price range of 29842.0 - 30036.0, but it fails to break the resistance at 30036.0, you may consider setting a Take Profit (TP) around 30454.0 and a Stop Loss (SL) around 29730.0 or based on your acceptable risk level.

Buy/Long 2: If you can break the resistance in the price range of 30342.0 - 30454.0, you may set a Take Profit (TP) around 30648.0 and a Stop Loss (SL) around 29842.0 or based on your acceptable risk level.

Sell/Short 1: If there is a touch of resistance in the price range of 30342.0 - 30454.0, but it fails to break the resistance at 30342.0, you may consider setting a Take Profit (TP) around 29842.0 and a Stop Loss (SL) around 30648.0 or based on your acceptable risk level.

Sell/Short 2: If you can break the support in the price range of 29842.0 - 30036.0, you may set a Take Profit (TP) around 29730.0 and a Stop Loss (SL) around 30454.0 or based on your acceptable risk level.

Technical Indicators July 20, 2023 03:36 PM GMT+7