Bitcoin, despite being under the control of bears, has shown signs of exhaustion in its influence as its price reclaimed the $29,000 mark on August 8. The recovery towards a crucial resistance level hints at a potential shift in the ongoing market sentiment.
BTC Price Action Nears a Falling Wedge Breakout
As BTC price experienced a modest rebound from local lows of $28,670, market observers noted a subtle uptick in Bitcoin’s performance. Despite the resistance faced, there is a sense of optimism in the air as a potential falling wedge breakout on daily timeframes caught the attention of traders. The pattern, which commenced in early July, holds a target of $32,000.
Examining Market Dynamics and Volatility
Throughout the August 7 trading session, Bitcoin mirrored the trends seen in the United States equities market. Despite this synchronization, market participants eagerly awaited indications of a potential market trend’s resurgence.
Trader Jelle emphasized the importance of the falling wedge breakout, questioning if Bitcoin can surpass the key resistance level. This wedge formation, observed since July, is the second one in two months, with a similar pattern emerging from April to June.
Finding Hope in Local Bottoms and Market Resilience
Yann Allemann and Jan Happel, co-founders of on-chain analytics firm Glassnode, highlighted that the dip below $28,000 could hold more significance as a local bottom than initially anticipated. This perspective adds a touch of optimism to the current market environment.
Bitcoin’s recent price behaviour has been expressing a lack of movement. The price range remained narrow over the past 10 weeks. Glassnode analysts noted that the 30-day price range has become exceptionally tight, indicating a mere 9.8% price band over the last month. Such levels of consolidation are rare for Bitcoin, creating a sense of anticipation for a potential breakout.
BlackRock’s Bitcoin ETF Impact and Technical Outlook
The excitement around BlackRock’s spot Bitcoin ETF, which caused notable volatility in mid-June, appears to have waned. With the Securities and Exchange Commission (SEC) unlikely to reach a decision on spot Bitcoin ETFs until September, the current low volatility suggests a lack of selling pressure among Bitcoin holders. Meanwhile, cautious buying behaviour is evident at current levels.
Bitcoin’s price remains confined within a range of $28.6k to $31.8k. While the 20-day moving average crossed below the 50-day moving average, the longer-term 200-simple moving average provides support. Despite the prevailing low volatility, Bitcoin’s potential to rally towards either support or resistance remains feasible in the coming days. To trigger such a movement, a strong fundamental catalyst will be needed, given the current mixed technical outlook. Bitcoin might be down temporarily, but it’s far from being counted out.
