Bitcoin (BTC) is pushing support levels recently gained this week as geopolitical uncertainty raises the stakes for risk assets.
After an impressive monthly close, momentum appears to be waning for Bitcoin’s latest gains, according to data from Cointelegraph Markets Pro and TradingView, and stock markets aren’t helping the bulls.
Volatility remained low at the beginning of August, but the anguish over a possible confrontation between the United States and China due to the visit of the Speaker of the House of Representatives, Nancy Pelosi, to Taiwan, is already being felt in the Asian market this 2nd of August.
Amid talk of a “bear market rally” being all the current setup can describe, Cointelegraph takes a look at the crucial support and resistance levels the market is currently facing on the shorter time frames.
Traders are not convinced of the fate of the 200-week moving average
By analyzing the order book data On Binance, the world’s largest exchange by volume, hotspots for buying and selling immediately stand out.
Currently, the BTC/USD pair is eating a bid band just below $23,000. However, should all that liquidity be taken, there is little else to help price action closer to $21,000.
The strength of the buy and sell “walls” on the Binance order book can be misleading as high volume players can quickly move bids or asks from one level to another.
The new data was uploaded to social media by on-chain analytics resource Material Indicators on August 1. Additionally, he highlighted the importance of Bitcoin’s 200-week moving average (MA), just above $22,800.
As noted by the Material Indicators team, certain whales were attempting to hold the 200-week MA as support, but saw little consensus from other groups of traders, causing a subsequent drop below the trend line.
“It doesn’t look like they’re getting much help from other classes. I’m not sure how long they’ll be able to keep it up,” read part of the comments accompanying the note.
$28,000 and then “new lows”?
Despite the Taiwan situation baffling markets today, a short-term bull run for Bitcoin is not out of the question, even for some of its most conservative analysts.
For the popular Il Capo of Crypto Twitter account, the BTC/USD pair even had the potential to hit $25,000 before returning to current levels.
In response, fellow trader Jibon suggested a rally to $28,000 could occur before a bearish pivot materializes.
$28,056 Sir
— Trader_J (@Trader_Jibon) August 2, 2022
While keeping quiet about a potential downside target, Venturefounder, a contributor to on-chain analytics platform CryptoQuant, called $22,000 a “good price” to establish a long BTC position.
Altcoins, including Ether (ETH), seemed less attractive.
“I still think most altcoins are too expensive for this part of the cycle, or should I say Bitcoin is too cheap?” I ask on August 1.
“$22,000 is still a good price to go long on BTC for me. Can’t say the same for altcoins, not even ETH.”
ETH/USD was trading below $1,600 at press time, down around 4% on the day but still 12% higher than at the same time a week ago.
“Unless you think altcoins are going to break to their all-time highs against BTC soon, there is no point in going long,” Venturefounder added.
A look at the ETH/BTC chart meanwhile shows the importance of the 0.075 resistance for ETH bulls, which was not broken during the crypto rally in July.
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