Bitcoin price analysis for July 6-12: technicals suggest a breakout within the next few days
The main crypto has been trading in a tight range for the past few days but this is likely to end soon.
The central banks, led by the US Federal Reserve, have been buying assets since the 2008 financial crisis, which is a deviation from their earlier mandate. Founder and chief investment officer of Bridgewater Associates Ray Dalio said in an interview with Bloomberg that the reason why a central bank buys or sells an asset is not dictated by the demand and supply in the free market. Therefore, Dalio believes that “the capital markets are not free” anymore.
There is a belief among investors that the central bank will step in and print more dollars in case anything goes wrong. While this can be a short-term solution, it is not sustainable and could result in a currency war between nations.
When investors lose faith in fiat currencies, they are likely to look for alternative means to protect their wealth. Then, a flood of money could enter the crypto space boosting prices higher. However, this might not happen immediately. In the short-term, Bitcoin remains stuck in a range but is this likely to end? Let’s do the Bitcoin price trend analysis to find out.
Bitcoin price technical analysis: weekly chart
Bitcoin formed an inside week candlestick pattern last week as it closed at $9,078.25, with a marginal loss of 0.42 per cent.
Interestingly, the BTC to USD pair remained stuck inside a small range of $9,299–$8,908, which shows that both the bulls and the bears are undecided about the next directional move.
However, this tight range trading should not continue for long and soon, a trending move is likely to start.
A breakout of the long-term downtrend line of the symmetrical triangle will be the first indication that bulls have overpowered the bears. If the up move can scale above the $10,500 resistance, a new sustained uptrend is likely to start.
Conversely, if the bears sink the price below the moving averages and the $8,050.50 support, a deeper correction to $6,500 is possible.
As the range-bound action has been continuing for a while, when the next trending move starts, it is likely to be a strong one.
The Bitcoin price weekly analysis remains stuck in a range and is not showing an advantage either to the bulls or the bears. Let’s do the BTC price analysis of the daily chart to see if we find any setups that can predict the next move.
What is your sentiment on BTC/USD?
Bitcoin price technical analysis: daily chart
The bears are defending the 20-day EMA and have not allowed the price to rise above it for the past few days. However, they have not been able to sustain the selling pressure at lower levels as the dips below $9,000 have bounced sharply.
This suggests that the bulls are accumulating on any dip below $9,000. However, the buying might cease if the price dips below the $8,800–$8,632.65 support zone because below this zone, the short-term bulls might hurry to close their positions.
The 20-day EMA is gradually sloping down and the RSI has been trading below the 50 level, which suggests that bears have a slight advantage.
However, if the bulls can propel the price above the moving averages, it will indicate strength and attract buyers who have been sitting on the sidelines.
How to trade Bitcoin this week
As Bitcoin is not showing any definite trend, it is better to wait for either the bulls or the bears to establish their supremacy by a large range move.
A strong breakout above the moving averages or a breakdown below the $8,800–$8,632.65 support zone could offer a trading opportunity.
However, traders should wait for the breakout or breakdown to sustain before jumping in.
FURTHER READING: Best investments for 2020: what are your options?
FURTHER READING: The best cryptocurrencies to invest in summer 2020
FURTHER READING: XRP price analysis for July 6-12