- BTC still hovering around $30,000 support
- Analysts predict a sudden bullish uproar
- The March-2020 setup may repeat in a new high
YEREVAN (CoinChapter.com) — Bitcoin (BTC) hits a monthly low following a season-long downtrend. Meanwhile, some analysts predict its latest downside move is the start of a new extended breakdown, while others see it as a sign of the subsequent rebound phase.
In detail, the BTC/USD rate has been struggling to crash below the $30,000-mark for the past two months. At the time of press, the price hit a month-long low at $30,500. That is as much as a 3.3% daily decline at one point. Meanwhile, a lack of bullish solid follow-up upon a rebound from $30,000 has had bears predict super-downside scenarios, including an outright crash towards $20,000.
The bearish wave as of yet
The following support could be as low as $27,000, Bloomberg analysts predict. Presumably, we are amid a sell-off among short-term speculators. Unfortunately, BTC has yet to prove a good hedge, standing at a mere 6% annual return, nine percentage points lower than S&P 500.
Meanwhile, multiple indicators implied an upcoming bullish wave, showing signals of HODLing and accumulation. Moreover, the market sentiment from Twitter predicts an upsurge nearing.
On the other hand, it is becoming harder to trust these indicators when BTC continues slipping. The number of unique addresses is already declining. The US dollar is strengthening against the flagship cryptocurrency after SEC tapering news is no help either.
Will BTC reverse for another price spike?
In the meantime, not all traders are pessimistic towards digital gold. According to crypto-trading analyst Vince Prince, this price slide precedes a reversal high soon. The supposed upsurge should mark the third price reversal since September 2019.
His analysis presented below suggested that BTC is replicating the breakdown-and-rebound phases pre-COVID and at the start of the pandemic. Prince characterized these phases by abrupt declines followed by increasing momentum.
The technical analysis looks at the 20-EMA (Exponential Moving Average) in black. It also focuses on all the faster-moving EMAs down till the last one at the 55-EMA.
Whenever the black line crosses below the other, usually, traders foresee a bearish movement thereon. However, one can see that in the ascribed period Bitcoin 20-EMA has made these movements only and always before a recovery. The third such cross took place on July 16. Averaging previous cases, the rebound should happen in a 2-3 week period.
The Momentum Oscillator shows remarkable insight as well. During the described phases, the momentum crosses below the zero-baseline and is even lower than anytime before. Then, it turns upward. When the marker crosses the baseline, it is usually likely to continue in the same direction. For now, the indicator has hit the all-time low and has increased, close to crossing the zero-line again.
Prince is not the only analyst observing this trend. As Coindesk reports, this is the lowest 20-week simple moving average discount that Bitcoin has seen since March 2020. The bearish flooring is usually a sign of market support that is about to cause a bullish bounce.
As we continue waiting for BTC to cross or bounce off its current support, we should be cautious about the unexplored phenomena that keep presenting.