Bitcoin Up 20%, Bullish Rally Underway? Analysis of 16 July 2024

After diving below $60,000, Bitcoin managed to rebound by more than 20%. Let’s analyze together the future prospects of BTC’s price.

Bitcoin (BTC) Price Situation

After initiating a rebound attempt at $60,500, Bitcoin unfortunately faced selling pressure that plunged its price down to $53,500. It is at this price level that BTC sales subsided in favor of buyers. Indeed, after consolidating in the form of an ascending triangle below $59,000, Bitcoin’s price benefited from buyer support, propelling its price above its last identified peak around $63,800. This technical breakout suggests the possibility of a trend reversal of Bitcoin’s short-term downtrend currently in progress.

At the time of writing, the Bitcoin price is trading around $63,000. Thus, Bitcoin seems to be undergoing a slight downward correction. Nonetheless, the recent fluctuations of the primary cryptocurrency have allowed its price to return above its 200-day moving average. Although Bitcoin remains below its 50-day moving average, this is more convincing regarding the continuation of its medium to long-term trend. On the price momentum side, it is not surprising that it rebounded, as indicated by the BTC price itself and the oscillators. All these elements undeniably demonstrate significant new buying interest, making investors optimistic about the future of the cryptocurrency’s price.

The current technical analysis was conducted in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Today, he is a trainer at Family Trading, a community of thousands of active proprietary traders since 2017. You will find Lives, educational content, and mutual assistance around the financial markets in a professional and friendly atmosphere.

Focus on Derivatives (BTCUSDT)

The open interest of Bitcoin perpetual contracts has increased by more than 28%, with the addition of positions equating to nearly $2.5 billion. Although it has recently declined, this increase, coupled with a rise in its underlying asset, a positive funding rate, and insignificant liquidations, indicates that a majority of speculators anticipate a rise in Bitcoin’s price.

Following the rise of Bitcoin this weekend, it can be noted that Bitcoin CME contracts have left behind a bullish gap.

A bullish gap occurs when the price of a financial asset opens at a level significantly higher than its previous closing price, creating a void on the price chart. This phenomenon often indicates strong buying pressure and can signal an imminent upward movement.

The liquidation heatmap of recent months indicates that BTC/USDT has come into contact with the liquidation zone around $65,000. It seems that the cryptocurrency aroused selling interest, as its price was quickly revised downwards. Currently, the most significant liquidation zones of recent months are located on either side of Bitcoin’s price. Above the current price, we can note the zone around $67,500. However, the most apparent one is farther away, located between $72,000 and $73,000. Below the current price, we can note the subtle zone around $56,000 – $57,000. If the market approaches these levels, we could witness a massive triggering of orders, potentially increasing the cryptocurrency’s volatility. These zones therefore represent major points of interest for investors.

Hypotheses for Bitcoin (BTC) Price

• As long as Bitcoin’s price manages to stay above $61,000, we can anticipate the breakout of $64,000 – $65,000. The next resistance to consider, if the upward movement continues, would be the zone around $67,500. Higher up, we can highlight $69,500. At this point, this would represent an increase of approximately 11%.

• If Bitcoin’s price does not stay above $61,000, we could consider buyer interest support around $60,000. The next level to consider, if the downward movement continues, would be the value zone slightly below $58,000. Lower, we can place $54,000. At this point, this would represent a decrease of nearly 14%.

Conclusion

Despite initial selling pressure, Bitcoin found significant support that allowed its price to recover. Although undergoing a slight correction, Bitcoin shows positive signs of recovery, reinforcing investor confidence in its future prospects. However, it will be essential to closely monitor the price reaction at different key levels to validate or invalidate current hypotheses. It is also important to remain vigilant against potential “fake outs” and market “squeezes” in each scenario. Finally, let us remember that these analyses are based solely on technical criteria and that cryptocurrency prices can also evolve rapidly based on other more fundamental factors.