The price of Bitcoin is approaching its previous support levels. It has been experiencing a prolonged decline, which has taken it to a multi-year trough of around $17,000.
Although Bitcoin is trying to reclaim its lost territory, the selling pressure is still strong due to the uncertainty surrounding the Fed's monetary policy and the crypto space. The price of Bitcoin is trading at around $20,000.
According to analyst Michaël van de Poppe, Bitcoin is in a good position to continue its recovery if it can maintain its current price of around $20,000. He noted that if the price of Bitcoin can hold above this level, there could be more bullish developments.
"Sweep of the lows and holding, said Poppe. "As long as $20k holds, it should be fine for a sweep of the previous high at $21K and then a higher high at $23K and potentially $24K are doable. Longs still open."
$BTC looking fine here.
Sweep of the lows and holding. As long as $20k holds, it should be fine for a sweep of the previous high at $21K and then a higher high at $23K and potentially $24K are doable.
Longs still open. 🙂 pic.twitter.com/i1H2yAcRcP— Michaël van de Poppe (@CryptoMichNL) June 22, 2022
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Recovering from 'a bottom', not 'the bottom'
The price of Bitcoin fell by around 5% to approximately $19,832 in early afternoon trading in New York. Other cryptocurrencies such as Dogecoin, Solana, and Cardano also lost ground.
Mark Newton, a technical analyst at Fundstrat Global Advisors, noted that although Bitcoin has made a bottom, it is not yet "the bottom." He said that the next support level is around $23,300 and that the price could challenge the lows of June.
According to data from the Material Indicators, Bitcoin could be approaching its support level below $20,000. This suggests that the price could fall below its current levels.
There is currently around $30 million worth of orders and bids for Bitcoin at around $19,000. This support area should be critical in case the price goes near it.
If the supports at $19,000 fail, then there are still around $40 million worth of bids and orders at about $18,000 to $17,800. However, the order book is thin.
According to the analyst at Material Indicators, the price of Bitcoin is still holding its ground due to the lack of confirmation regarding the potential appreciation. Despite the market's positive sentiment, the rally failed to test the 200WMA. According to the Fire Charts, the market has around $60 million worth of liquidity.
Despite the lack of definitive confirmations regarding the potential appreciation, analysts at MI noted that it is still unclear when Bitcoin will bottom. However, they said various factors can help investors identify a possible reversal in the trend.
According to the analyst, Bitcoin's price usually goes through a period of consolidation before it begins to rise again. However, he noted that the market is overdue for a rally and that it can't confirm the potential appreciation until the 200 Weekly MA and the 200WMA are broken.
Positive correlation with stocks
For most of the year, cryptocurrencies have been moving in the same direction as the stock market. However, as concerns about an economic downturn grew, investors started to pull back from risk assets.
According to a note released by Informa Global Markets, the price of Bitcoin rose during the last few days as the broader risk sentiment improved.
According to the firm, data from Glassnode revealed that almost half of all addresses in the market were still worth more than their coins when they entered. This suggests that the current bear market may be less severe than expected. On the other hand, the average purchase price of all cryptocurrencies in circulation during June was around $23,430, which is above current levels.