Bitcoin has broken out above a sinking resistance score. It has jumped to the $21,000 support area. BTC has now achieved a more complex corrective structure.
Bitcoin has jumped to a short-term support level after deviating below it. Reclaiming this support spot is crucial for the upward movement.
Bitcoin had been trading below a declining resistance score since April 5. The line caused several rejections, with one that recently happened on June 7. Following this situation, Bitcoin declined to a long-term low of $17,622 on June 18.
BTC has been overall moving up since then. It broke out above the score registered on July 18. However, it has yet to start a radical upward move. On the contrary, it seems to be declining to validate the score it currently has as support.
The movement of the daily RSI is interesting since the indicator got balanced and returned to its optimistic divergence trendline. The numbers in this index are about to jump for the third time, but for this upward move to maintain its way, the index mustn’t deviate and go below this trend.
If the upward move continues, the closest resistance area will explore the $29,370 area. This target appears to be the 0.382 Fib backtrack resistance level. Conversely, new local low rates could arrive soon if the RSI deviates from this score.
Potential Support Levels
Various charts reflect that BTC had been recovering and going above an ascending support line since June 19. Currently, the support area is $20,200, aligning with the 0.618 Fib backtrack support level.
Currently, Bitcoin moves through a solid support area registered at $21,000, created by the 0.5 Fib retracement level and a horizontal support area. It deviated below it on July 26 before returning to its spot the next day. Its validation as support would be a sign that the short-term correction has already reached its completion.
Bitcoin is trying to get away from the midline and desires to ascend a bit more. Doing so would be a solid sign that the correction is complete.
Cryptocurrency prices, especially bitcoin, face a lot of struggles this year, with the digital currency market showing vulnerability to other significant issues. This situation has led some entities in the crypto space to announce the arrival of crypto winter.
A crypto winter means that digital assets prices suffered a decline and then stayed low for weeks or even months. The signs are everywhere; The most significant one was the failure of the TerraUSD crypto project this May, then the lending platform Celsius Network halted withdrawals, prompting a sell-off that pushed Bitcoin to a 17-month low.
According to market experts, other vital aspects of this crypto winter are high inflation, rising interest rates, and the financial confusion that has followed Russia’s conflict with Ukraine. Crypto markets ascended in late 2020 and 2021 because the US Federal Reserve injected a prominent amount of funds into markets in response to the COVID-19 crisis.
By: Jenson Nuñez