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Watch Out for These Levels in Bitcoin Price as Investors Look for a New Catalyst
Key points
- Bitcoin fell more than 12% in the second quarter as investors appeared to be on the sidelines waiting for a new catalyst to counteract declining spot inflows into Bitcoin ETFs and uncertainty over when the Federal Reserve might start cutting interest rates.
- BTC continues to trade near the bottom of a trading range, with the relative strength index moving towards oversold levels, indicating weakening price momentum.
- If it breaks below the trading range, BTC price could find support around $53,000, $44,000, and $38,000.
- The measurement principle, which calculates the distance between the lower and upper trend lines of the trading range and adds the amount to the upper trend line of the pattern, predicts a target price of $87,300.
Bitcoin (BTC) lost more than 12% in the second quarter, as investors appeared to be sitting on the sidelines looking for a new catalyst to counter the decline spot Bitcoin exchange-traded fund (ETF) inflows and uncertainty about when the Federal Reserve could start cutting interest rates.
Despite the decline in sentiment, Bitcoin supporters may find comfort in the fact that the digital asset has averaged a 7% return in July between 2013 and 2023, according to data from cryptocurrency analytics site Coinglass.
Below, we use technical analysis to identify the key interest levels on the Bitcoin chart that investors might want to keep an eye on this quarter.
Levels to Watch in a Time of Price Weakening
Since hitting its all-time high in mid-March, Bitcoin has fluctuated in an orderly fashion trading range below average volumehighlighting the lack of enthusiasm from market operators.
Over the past few weeks, BTC continues to trade near the bottom of the range, with the Relative Strength Index (RSI) moving towards oversold levels, indicating weakening price momentum. Amid a break below the lower trend line of the 200-day range moving averageInvestors should monitor three key levels.
First, it is worth keeping an eye on the $53,000 area, a region of the chart that could attract buying interest in a period of Consolidation as Bitcoin has been on a bullish trend throughout February.
A close below this level could see a move down to around $44,000, where the cryptocurrency would likely find support. support from price action between December 2023 and February of this year.
A more significant correction could see the price of the digital asset revisit the $38,000 level, which sits near a four-week consolation period that formed as part of the broader upward trend in November last year.
Monitor this level amidst a new all-time high
While technicals point to short-term weakness, it is also worth identifying an upside target price to assess an area on the chart where investors can book profits if the legacy cryptocurrency continues to create a new all-time high (ATH).
We can do this by using the measuring principle. First, we calculate the distance between the lower and upper trend lines of the dollar trading range and add this amount to the upper trend line of the pattern. In this situation, we add $14,500 to $72,800, which projects a price target of $87,300.
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