Bitcoin price will encounter strong resistance in the $ 34,000- $ 37,000 range as the month closes
Bitcoin has ignored news of regulatory action in China by rising 24% from recent lows, but a sustained rally could be delayed by strong technical resistance in the $ 34-37,000 range.
The world’s leading cryptocurrency fell to a 5-month low of $ 28,893 on June 22, before rising to $ 35,487 three days later.
The recovery was thwarted by a downward sloping trendline – which has refused to move up six times since mid-May. Trend lines act as support and resistance levels, once widely recognized by traders, creating a floor for a rally or a high for a sustained downtrend.
The strength of a level usually increases with the number of touches and descents.
Strong resistance has emerged in recent weeks when Bitcoin falls – Bitcoin Price 4h Chart | Source: TradingView
A false outbreak occurred on May 13-18. June, when the price rose to a recent high of $ 41,341 before falling below the trendline.
The inability to flip the trendline in support after the initial crossover encouraged the bears, which subsequently abandoned Bitcoin on Dec.
There was also a rejection around the 200 EMA on both the 4-hour and daily charts – a rare synch in time frames that added resistance.
A rally in mid-June broke the downtrend line (in blue) – Bitcoin Daily Chart | Source: TradingView
At the time of writing, Bitcoin is trading at around $ 34,000 after encountering short-term resistance at the 50 EMA on the 4-hour chart.
Movement above this level triggers three active resistance bands on the same chart:
- Trend line ($ 34,600);
- EMA 144 ($ 35,700);
- 200 EMA ($ 37,000).
The two moving averages are parallel and falling at a rate of about $ 300 per day.
A successful break through all 3 levels will pave the way for a dizzying breakout of $ 41,000 that has been a local top twice since May.
In the meantime, traders will keep a close eye on the higher timeframe monthly chart which opened at $ 36,893 in June.
Bitcoin Monthly Chart | Source: TradingView
A Wednesday close above or near the opening price of the month creates a long-tail candle – which is viewed by many as a bullish signal for showing that the market has tried to keep levels lower and failed.
This scenario would also cause the price to move back above the 10-month EMA, raising hopes that the downtrend that began in April is over.
You can see the BTC price here.
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
According to Forbes