Bitcoin price analysis for July 27-August 3: a quick rally to $12,000 is possible

Bitcoin is likely to play catch up with gold as investors take advantage of its attractive valuation

The Office of the Comptroller of the Currency, the US banking regulator, has recently allowed “national banks and federal savings associations of all sizes” to offer crypto custody services to their clients. This is a major step ahead as this move may boost the confidence of the institutional investors who are likely to view cryptocurrencies in a more positive light.

At the same time, when central banks around the world are on a money printing spree, Reserve Bank of Australia governor Philip Lowe has warned that there is “no free lunch.”

“The tab always has to be paid and it is paid out of taxes and government revenues in one form or another.”

The investors who understand this have been buying gold, which has pushed it close to its lifetime high. In comparison, Bitcoin’s price is still way below its all-time high. This is likely to attract investors who might start accumulating when the price is still low.

Let’s do the Bitcoin price trend analysis of both the weekly chart and the daily chart to see how the price could react to the expected inflow of money.

Bitcoin price technical analysis: weekly chart

Bitcoin seems to have woken up from its slumber and has started moving. It rallied 7.91 per cent last week, which indicates that the bulls are back in action.

With the rally last week, the BTC to USD pair has broken out of the long symmetrical triangle. This is the first positive development as the target objective of a breakout from this pattern is $28,500.

However, this target is unlikely to be achieved in a hurry because the bears will pose a stiff challenge at $14,000 and then again at $17,000 before the lifetime high is achieved.

Currently, the bears might offer stiff resistance at $10,550 but if this level is crossed, the inverse head and shoulders pattern will also complete. The uptrend is likely to pick up momentum above this level.

The RSI has risen above the 60 level and the 20-week EMA has started to turn up, which suggests that the bulls have the upper hand.

This bullish view will be invalidated if the price turns down from the current levels or $10,550 and breaks below the moving averages. Such a move will indicate a lack of demand at higher levels.

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The Bitcoin price weekly analysis has turned positive and is pointing to a possible sustained up move for the next few weeks. Let’s see if the BTC price analysis of the daily chart also supports this view.

Bitcoin price technical analysis: daily chart

Bitcoin broke above the moving averages on July 21, which was the first sign that bulls were back in the game. However, unlike previous occasions, the buying did not dry up at higher levels.

Sustained buying helped the pair break above the $10,000 psychological barrier on July 26, but the bears were not ready to relent. They pulled the price back below the $10,000 level by close (UTC time). However, with today’s up move, the bulls have reasserted their dominance. 

There is a resistance at $10,550. Once this is cleared, the momentum buyers who had been waiting on the sidelines are likely to jump back in once again and this could result in a quick rally to $12,000.

Conversely, if the bears defend the $10,550 level successfully, the pair might enter a minor consolidation or correction. If the bulls do not give up much ground, it will increase the possibility of the start of a new sustained uptrend.

How to trade Bitcoin this week

The range-bound action in Bitcoin has resolved to the upside. If the bulls can scale the price above $10,550, a new uptrend is likely. In an uptrend, the traders should view the dips as a buying opportunity.

Many times, when the price breaks out from a large range, it rallies sharply. Traders who keep waiting for a pullback to enter miss out on a large part of the up move. Therefore, they can consider buying the breakout with a suitable stop-loss.

Bitcoin to US Dollar
Daily change
Low: 16492.4
High: 16643.5

FURTHER READING: Bitcoin explained simply: everything you need to know

FURTHER READING: Bitcoin vs Bitcoin Cash vs Bitcoin SV: the ultimate guide

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