- Bitcoin has recently lacked significant catalysts that could spark big price swings
- This low volatility period could come to an end if the crypto comes across certain technical levels
- With US retail sales and Fed minutes in sight this week, could Bitcoin's uneventful summer finally come to an end soon?
Bitcoin has drifted sideways during the summer months amid low volumes. Similar to its patterns around the same time last year, the cryptocurrency's price volatility remains remarkably low.
After its surge to the $30,000 level in June, Bitcoin has mostly followed a stable path, with its weekly price fluctuations rarely exceeding 1%.
This phase of relative stability within the Bitcoin market, characterized by minimal upward shifts, has contributed to a gradual decline in price. As of the previous month's assessment, Bitcoin seems to have comfortably settled around the $29,000 range.
The current situation suggests that the absence of significant catalysts to drive Bitcoin's price higher, a trend that began when it fell below the 2023 projection, is a key factor in maintaining the horizontal price action.
In this piece, we will assess potential support and resistance levels that might trigger a volatility spike for the crypto.
Analyzing the daily Bitcoin chart reveals the nearest resistance zone for triggering a short-term upward movement, situated between $29,500 and $29,700. A clear daily close above this range becomes crucial to continue the short-term upward trend, with the next goal being to surpass $30,500.
This level is pivotal as it signifies a recapture of the 2023 uptrend, acting as a critical point for Bitcoin to break free from its horizontal movement and initiate an ascent. In the higher region, attention will be focused on a weekly close above the $31,500 mark, where the uptrend slowed down in June, potentially paving the way for a significant price breakout.
On the lower end, the $29,150 support level remains steady. Bitcoin's price has been fluctuating within a narrow range around this value since July 24. Notably, there has been no substantial movement below this level. However, if the day closes below the 3-month Exponential Moving Average (EMA) value, which has been tested twice previously due to increased volatility, it could accelerate a downward momentum. At present, the 3-month EMA at the $28,800 range plays a pivotal role as dynamic resistance.
Consequently, in case buyers successfully defend the $28,800 support during possible pullbacks, short-term resistance points will be closely monitored for potential trend reversals. Alternatively, if BTC fails to maintain this support, it might retrace to the $26,500-$27,600 range, completing the cycle formed in June. Such a retreat could alleviate the market's price compression and potentially offer a buying opportunity for traders, potentially signaling a stronger upward trend for Bitcoin.
Bitcoin Eyes US Retail Sales, Fed Minutes
Considering this week's significant developments: Tomorrow, the US July retail sales data will be released, offering insights into consumer behavior and potential hints about inflation. This will likely indirectly impact Bitcoin, as the Fed closely observes them for monetary policy decisions.
Additionally, the release of the FOMC meeting minutes is crucial, shedding light on the details of the recent 25 basis point rate hike and revealing which Fed State Presidents support the interest rate policy. While the expectation is that the Fed will keep rates unchanged for September, these minutes might offer clues about the possibility of further rate hikes later in the year.
On another note, the situation with spot ETFs, which can directly influence the Bitcoin market, remains uncertain. The SEC's decision to delay Ark Invest's application implies that there won't be a new decision until September, likely supporting a sideways trend. Consequently, the Bitcoin market may continue to be influenced by buying or selling positions accumulated in the futures markets until September.
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Disclaimer: This article is written for informational purposes only; it is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation, advice, counseling, or recommendation to invest. We remind you that all assets are considered from different perspectives and are extremely risky, so the investment decision and the associated risk are the investor's own.