Bitcoin: Can Bulls Defend the Year's Most Critical Support Level?
The past week dealt a blow to Bitcoin's recent uptrend that started in June, steering us toward a critical support zone.
Buyers jumped in when the price reached $25,300, putting a stop to the selling frenzy and showing that demand remains alive in the $25,000 region. As a result, Bitcoin started to find its footing around the $26,000 range.
When we assess the broader outlook, however, the lack of sufficient buyers above those levels indicates that the downside risk persists. The current levels had previously served as a support zone during the broader bearish movement from April to June.
During that period, as predictions of further declines for Bitcoin gained traction, the BlackRock's Bitcoin ETF application news intervened and acted as a catalyst for the cryptocurrency's movement toward the $30,000 range.
Looking ahead, the remaining days of August are not expected to bring data that could significantly impact Bitcoin. The confirmation of hawkish views from the FOMC minutes negatively influenced the crypto, leading to a drop. Moreover, Chinese real estate giant Evergrande's bankruptcy filing in the US helped slash global risk appetite.
From a technical perspective, we will be closely monitoring the $26,200 range to determine if these two events have been factored into the pricing. Daily closures above this price level may motivate new buyers to enter the market.
Furthermore, during the downturn, approximately $1 billion worth of futures positions were liquidated. This gives the impression that a potential bottom could be forming in the short term.
In 2023, the support zone at $26,000 has been critical. However, if it breaks, the new support line may shift to $24,000. The absence of a catalyst to spark an upward
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