Bitcoin price analysis (12-18 July): get ready for a breakout soon

Bitcoin’s tight range trading is likely to result in a breakout within the next few days.

Bitcoin has been range-bound between $31,000 and $41,000 for the past few weeks, and analysts are divided about the next directional move. 

Piper Sandler’s chief market technician, Craig Johnson, recently said on CNBC that Bitcoin may not decline much from the current levels. However, Johnson added that the two previous bear cycles lasted “1,000 days”, hence traders should be ready for a long consolidation before the next leg up.

On the other hand, Scott Minerd, founder and chief investment officer at Guggenheim Partners, said in a recent interview with CNBC that Bitcoin’s current fall looks like a crash. This means a possible 70% to 80% correction from the highs, giving Bitcoin a target “between $10,000 and $15,000”.

However, the recent correction in cryptocurrencies has not scared existing institutional investors. A recent survey by London-based crypto fund Nickel Digital Asset Management of hedge fund executives, wealth managers and institutional investors already holding crypto assets showed 82% of those surveyed planned to increase their exposure to crypto between now and 2023. 

What are the critical levels to watch on the upside and the downside that will indicate the start of a trending move? Read our bitcoin price trend analysis to find out.

Bitcoin price technical analysis: weekly chart

Bitcoin’s price rebounded off the 50-week simple moving average (SMA) last week, indicating that bulls are buying on dips to this support. The BTC/USD pair corrected marginally by 2.89% to end the week at $34,260.50.

The 20-week exponential moving average (EMA) continues to slope down and the relative strength index (RSI) is in negative territory, indicating a marginal advantage to bears.

A break and close below the 50-week SMA will be the first sign of weakness. The next critical support on the downside is $28,639.70, from where the pair has rebounded on two previous occasions. 

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The bulls will try to defend this level and if they succeed, the range-bound action is likely to continue. But if bears sink the price below $28,639.70, selling could pick up momentum and the pair could decline to the next major support at $20,000.

The bitcoin price weekly analysis shows the pair has been struggling to rise after rebounding off the 50-week SMA. This indicates a lack of demand at higher levels and increases the risk of a breakdown.

Bitcoin price technical analysis: daily chart

Bitcoin’s price has been trading below the 20-day EMA for the past few days, but the bears have not been able to capitalise on the weakness and challenge the support at $28,639.70. This suggests a lack of sellers at lower levels.

Both moving averages have flattened out and the RSI is just below the midpoint, suggesting a balance between supply and demand. 

If bulls drive the price above the 50-day SMA, it will signal accumulation at lower levels. The pair could then rise to $36,658. This level is likely to act as stiff resistance and if the price turns down from it, the pair may remain range-bound between $36,658 and $28,639.70 for a few more days.

On the other hand, a break above $36,658 will clear the path for a possible move toward the $41,327.35 to $42,553.25 resistance zone. A breakout and close above this zone will indicate a possible change in trend.

How to trade bitcoin this week

Bitcoin’s price has been trading in a tight range for the past few days. This suggests that traders are not taking large bets due to the uncertainty. During such times, the price action is random. Therefore, it is better to wait for a trend to be established before initiating positional trades.

Trade bitcoin to US dollar – BTC/USD chart

Bitcoin to US Dollar
Daily change
16801.3
Low: 16759.7
High: 17091.7

Further reading:

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