Bitcoin bulls pushed the price back above $34,000 but analysts warn that a variety of bearish factors remain a threat in the short term.
On July 9 Bitcoin and the wider cryptocurrency market saw a moderate relief rally that helped recover some of the losses seen on Thursday but a handful of analysts continue to caution that BTC could still drop to the $24,000 to $29,000 range in the short-term.
Data from Cointelegraph Markets Pro and TradingView shows that the price of Bitcoin was bid higher during the morning trading hours on Friday and managed to climb back above $34,100.
Sentiment among traders received a slight boost after Bitcoin price reversed course and rallied back to $34,000 but the price still remains trapped between key resistance and support levels and the lack of buy volume is still a valid concern.
Tempting Beef, a pseudonymous trader on crypto Twitter, also pointed out that the total crypto market cap and altcoin market cap remain in a precarious position.
#Crypto total market cap and altcoin market cap both failing to flip their key pivots and forming lower highs. Me sad.
Unless we pull it together, I expect us to just play in this range maybe with some standouts like $AXS. Could be a boring summer. pic.twitter.com/Ab4eVSCbdo
— Tempting Beef (@tempting_beef) July 8, 2021
Élie Le Rest, partner at digital asset management firm ExoAlpha, also pointed out that along with the “non-directional trend” in BTC, the market is also “witnessing a decrease in trading volume” that has led to “more wild reversals within the range, hurting directional traders.”
Le Rest said:
“Inside this range, we are witnessing pumps and dumps with prices slowly grinding higher before being quickly slammed down, typical of low liquidity markets.”
Due to the market volatility, Le Rest sees market participants staying on the sidelines as they wait “for the Grayscale trust to stop offloading their Bitcoins and for the Chinese regulatory crackdown to cool-off.”
Le Rest also pointed to the scrutiny financial regulators all over the world are putting on Binance, as “a considerable problem that reduces the capacity of the market to get the capital inflow needed to break above $40,000.”
According to Le Rest:
“Despite these elements already priced by the market, we continue to witness strong Bitcoin adoption by traditional asset managers looking for a good entry point to be positioned for the next leg up.”
Signs of support above $30,000
While it’s true that BTC price fell below the weekly support level near $34,500, pseudonymous crypto Twitter analyst Rekt Capital was quick to point out that the price found support at another established support level near $32,200 resulting in “no major changes in the trend.”
Related: Bitcoin is a miracle and better than gold, says Apple co-founder Wozniak
One possible bullish indicator highlighted by some analysts is the ‘Entities net growth’ Bitcoin metric, which has climbed to new highs in recent weeks as the price of BTC languished below $40,000.
In times like these when uncertainty prevails, the simple strategy of dollar-cost averaging is one that even the most experienced traders turn to in order to decrease stress and re-focus on the long-term price outlook.
If Bitcoin price drops, I will buy more.
If Bitcoin price goes up, I will also buy more.
That is the beauty of dollar cost averaging.
— The Wolf Of All Streets (@scottmelker) July 8, 2021
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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Author: Jordan Finneseth