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Bitcoin: Bears in the Driver's Seat as Crypto Breaches Several Key Support Levels

Published 21/06/2024, 08:15 pm
BTC/USD
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Bitcoin has been stuck in a range since March, trading in a 15%-20% band, raising concerns among crypto investors. A look at the weekly chart reveals Bitcoin's continued consolidation within the ascending channel established in 2023.

Notably, the current trading range sits near the channel's upper boundary, which also coincides with Bitcoin's 2021 peak. This suggests that despite reaching a new high in 2024, Bitcoin has yet to surpass its previous record.

The question remains: can Bitcoin bulls hold on with new critical support zones coming into play?

Bitcoin Technical View: Weekly Chart

Bitcoin has struggled to break through resistance, reminiscent of its sideways movement between April and October 2023. Back then, a similar price point of $30,000 faced resistance, which now translates to the $70,000 region.

While expectations of Federal Reserve rate cuts and a spot ETF launch fueled the market last year, the current climate paints a different picture.

BTC/USD Weekly Chart

The crypto market continues to grapple with a hawkish Federal Reserve. Although the initial excitement surrounding a potential spot ETF has subsided since the beginning of the year, the lack of new positive developments is leading to a stagnant Bitcoin chart and unnerving investors.

Blockchain analytics firm Santiment recently revealed a prolonged phase of fear, uncertainty, and doubt (FUD) in the market, reflected in negative social sentiment on Bitcoin (according to posts on platform X). This negativity is further amplified by Bitcoin's recent dip below $65,000, indicating investor uneasiness and apathy.

Negative news appears to have a swift impact on Bitcoin's price. Today's market unease stems from reports of the German government selling nearly $195 million of its $3 billion Bitcoin holdings. Additionally, the ongoing outflow from spot Bitcoin ETFs over the past five trading days continues to exert downward pressure.

Looking Ahead: Can Bitcoin Bulls Hold on?

Bitcoin’s technical indicators point to a bearish outlook as several critical supports have been breached. The downtrend, initiated after BTC was rejected from the upper band of its channel, continued below a significant support level.

Earlier this week, Bitcoin's bullish momentum faltered, breaking below the Fib 0.236 level at $65,600. Simultaneously, short-term exponential moving averages (EMAs) started trending downward as BTC prices fell below these averages. The 3-month EMA at $64,900 was also breached today, suggesting a potential move towards the main support at $61,000.

BTC/USD Daily Chart

The $61,000 support level, aligned with the Fib 0.382 value and the bottom of the consolidation area, has been a stronghold since March. However, current indicators suggest that sellers might drive Bitcoin down to this level. Weekly closes below $61,000 could escalate the risk of Bitcoin targeting support zones in the $50,000 range.

To reverse the negative outlook, Bitcoin must first reclaim the $65,650 support. Following this, the $66,730 level could serve as a resistance. Daily closes above this threshold might enable Bitcoin to test the main resistance zone around $70,000 again. Conversely, if Bitcoin fails to sustain a rally above the $65,000-$66,000 range, the downward momentum could intensify.

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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple points of view and is highly risky and therefore, any investment decision and the associated risk remains with the investor.

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