Last week broke Bitcoin’s recent uptrend that started in June, entering a critical support zone.
As the price hit $25,300, buyers jumped in, ending the selling frenzy and showing that demand is still alive in the $25,000 region. As a result, Bitcoin began to establish itself in the $26,000 region.
However, assessing the broader outlook, the lack of sufficient buyers above these levels suggests downside risks remain. The current levels have historically served as a support zone for the sharp declines from April to June. During this period, the news of BlackRock’s bitcoin ETF filing triggered the cryptocurrency’s rally towards the $30,000 level amid high-profile predictions that the price of bitcoin would fall again.
Looking ahead, we do not expect to see any data that could have a significant impact on Bitcoin in the remaining days of August. A hawkish view confirmed in the FOMC minutes negatively impacted cryptocurrencies, leading to a drop. Furthermore, the filing of bankruptcy in the United States by Chinese real estate giant Evergrande also contributed to a decline in global risk appetite.
From a technical standpoint, he will be keeping a close eye on the $26,200 area to see if these two events are priced in. A daily closing price above this price level may incentivize new buyers to enter the market.
In addition, approximately $1 billion worth of futures positions were liquidated during the economic downturn. This gives the impression that a bottom may form in the short term.
In 2023, the $26,000 support zone was very important. However, if it breaks out, the new support line could move to $24,000. The lack of triggers to trigger an up move could pave the way for a continuation of the downtrend.
As long as Bitcoin price stays below $26,200, it could eventually test $24,000. However, before that, the next support line appears at $24,800 and if it breaks, the area between $20,800 and $23,000 could become the focus.
A foothold above the $26,200 level is key to enabling potential bullish momentum. After that, if Bitcoin manages to break out of the $27,300 level on the next move, it could break out of the downtrend and start the recovery process. While the spot bitcoin ETF may not have received approval yet, a positive decision could still have a big impact, especially since it is scheduled for release in September.
Based on this analysis, the price could range between $24,800 and $27,300 over the next two weeks, with $26,200 as a key reference point.
In our regular technical indicator tracking, the Stochastic RSI peaked during his $30,000 test for Bitcoin this month. This bearish trend indicator is currently in oversold territory on the daily chart and could support a downside as long as it remains below 20.
Additionally, the short-term EMA reading continues to reflect a bearish outlook due to the reversal crossover. Another notable technical observation is that Bitcoin price has accelerated its downtrend after forming a daily candlestick below the 3-month EMA. Historically, this moving average has acted as a dynamic support since his July.
Moreover, the downward moving averages of the 8-day and 21-day EMAs and the 3-month EMA indicate further declines are likely as the Bitcoin price plunges into negative territory in the current scenario.
