There are many signs that the price of Bitcoin (BTC) is likely to make a big move in the next few days or even earlier.
Looking at the bigger picture, BTC has been trading between $30,000 and $42,000 since the May 19 crash and between $30,000 and $35,000 since June 19. Overall, BTC is at a crossroads, with a significant descending trendline dating back to mid-May when it last traded above $50,000.
Looking at the shorter-term picture, the price continues to consolidate below the 20-day MA as the price struggles to climb above $34,000. BTC fell below the short-term ascending trendline on Thursday, but buyers managed to protect the support level at $32,700 on the daily timeframe. However, BTC was still rejected and still failed to break the 20-day MA resistance.
Reasons Why BTC Price Action Is Close
The daily chart below includes the Bollinger Bands indicator, a technical indicator that can predict major market moves and is currently at its tightest level since December 2020.
At the end of 2020, BTC broke $20,000 on the upside, setting a new ATH 3 years later. Following this breakout, BTC gained over 200% in four months until it set the current ATH at almost $65,000 on April 14, 2021.
The tighter the level of the Bollinger Bands, which is the distance between the upper and lower bands, the higher the chance for a strong price action to follow.
Another indicator of significant movement to come is the declining trading volume in July, which includes the two lowest trading days by volume in the whole of 2021. This movement was recorded last Saturday and Sunday.
Typically, when volume stays very low, it’s followed by a big move in either direction. The volume chart below shows the daily volume level. As can be easily seen, May 19 was the day with the highest volume, but so far the first 10 days of July are very low in volume.
Besides the techniques, there are some key indicators that we cannot ignore: The crypto markets are unlocking the first GBTC shares, which is expected to happen within the next week.
Next Saturday, 16K BTC from the Grayscale Trust Fund will be unlocked and investors fear that these coins will potentially be sold. However, as often happens, the market can react in the opposite direction. In any case, investors are not clear about the upcoming GBTC lock and how it will affect the market and prefer to wait.
All in all, the aforementioned reasons coupled with the fact that BTC has been consolidating for almost two months, we could see a massive price action in the next few days or even the next hours.
BTC Price Support and Resistance Levels to Watch
Key Support Levels: $33,500, $32.7K, $31,500 – $31,185, $30,600, $30K.
Key Resistance Levels: $34,000, $35,600, $36,620, $38,500, $39,500.
Looking ahead, the first major resistance is located around $34,000 provided by the 20-day MA and the long-term descending trendline. It is followed by $35,600 (50-day MA), $36,620 (late June high), $38,500 (1,272 Fib Extension), and $39,500 (June high).
On the other hand, an initial support is located at $33,500. It is followed by $32.7K, $31,500 (daily double-bottom support), $31,185 (1,618 Fib Extension to the downside), $30,600, and $30,000.
The daily RSI remains below the midline and is still unable to break through the long-term descending trendline, preventing the RSI from rising higher since late February.
Bitstamp BTC/USD Daily Chart
Bitstamp BTC/USD 4-Hour Chart
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