Bitcoin price analysis for July 13-20: graphs suggests a sharp move within the next few days

BTC is setting up for a sharp move, which is likely to start a sustained trending move

Bitcoin’s correlation has decreased with gold but is on the rise with the S&P 500. This suggests that the market participants are currently viewing Bitcoin as a risky asset and are not treating it like digital gold. However, this could change quickly as a few weeks back, Bitcoin was moving in tandem with gold. There was also a period where the biggest cryptocurrency was dancing to its own tune, without following either gold or the S&P 500.

Analysts at Weiss Ratings believe that Bitcoin is getting ready for a “ferocious rally” within the next 12 months and they project a target objective of $70,000 based on the popular stock-to-flow analysis model.

Let’s do the Bitcoin price trend analysis of both the weekly chart and the daily chart to see if we spot any bullish setups that project the start of the next leg of the up move.

Bitcoin price technical analysis: weekly chart

After four consecutive weeks of closing in the red, Bitcoin ended last week in the green as it rallied 2.49 per cent. 

The BTC to USD pair is currently consolidating the gains made from the March lows. The price is getting squeezed between the downtrend line of the symmetrical triangle and the moving averages. 

Usually, every drop in volatility is followed by a sharp expansion. The longer the squeeze, the stronger the breakout will be. However, it is difficult to predict which way the expansion will happen, hence, it is better to wait until then. 

If the tight range resolves to the upside, the possibility of a break above $10,500 increases. If that happens, it is likely to attract a lot of traders who are waiting on the sidelines, waiting for a trending move to start.

Conversely, if the volatility expands to the downside, it is likely to quickly correct to $8,050.50. A break below this support would be a huge negative and could intensify selling.

A word of caution for the traders. Sometimes, the first breakout from such tight ranges can be a fakeout, wherein, the price breaks out but then quickly retraces and breaks out in the opposite direction within a short time. 

That catches a lot of aggressive traders off guard. Therefore, it is better to confirm the breakout before jumping in to buy or sell.

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The Bitcoin price weekly analysis suggests that the volatility is likely to expand soon, which could throw up trading opportunities. Let’s do the BTC price analysis of the daily chart to determine who has the upper hand.

Bitcoin price technical analysis: daily chart

The daily chart is showing a clear balance between the bulls and the bears, as both moving averages are flat and the RSI is also near the midpoint. The charts are not giving any hints on which way the breakout will happen.

However, there are a few key levels to keep an eye on, both on the upside as well as on the downside.

A sharp breakout of $9,796.60 will be the first sign that the bulls have overpowered the bears and are now likely to attempt a breakout of $10,500. Similarly, on the downside, a drop below $8,632.65 will signal advantage to the bears. Until then, the price action is likely to remain stuck in a tight range.

How to trade Bitcoin this week

At times, the best trade is to not trade at all. Attempting to trade a small range will only hit the stop-loss in both directions as the price action will be random. Therefore, traders can wait for a strong breakout or breakdown to happen before initiating a new position. 

As the breakout is happening after a period of tight consolidation, the breakout might not pullback and offer entry opportunities. Hence, traders might have to make quick decisions and initiate the trade as soon as the breakout is confirmed.

FURTHER READING: The best cryptocurrencies to invest in summer 2020

FURTHER READING: How do crypto exchanges work?

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