- Bitcoin is up by a total of 6% today as the cryptocurrency soars above $34,000
- The primary cryptocurrency saw a rollercoaster of price action yesterday in which it dropped as low as $29,000 but then quickly rebounded back above $30K
- Some metrics might be pointing to a positive price action head
|Key Bitcoin resistance levels||$33,500, $33,00, $32,250, $31,580, $30,900|
|Key Bitcoin support levels||$35,000, $36,675, $37,500, $38,000, $39,925|
*Price at the time of publication
Bitcoin has been on a rollercoaster trading period this 24-hours after the cryptocurrency dropped by a steep 16% yesterday from a high of $33,350 to a low of $28,800. By the end of the day, the bulls had regrouped and pushed BTC back above $30,000 to close the daily candle above $31,000.
It was a quick recovery, and Bitcoin only spent a total of 2 hours beneath the $30,000 level in total. In fact, BTC produced one of the most robust “V-Shaped” recoveries on the 15-minute charts:
It took the market a short 4 hours and 30 minutes to recover by almost 16% after dipping beneath $30,000.The rebound might have started to show some positive on-chain metrics that point toward the upside over the coming weeks.
For example, the total illiquid supply change for BTC has finally turned positive again.
The chart shows the change of coins going from an illiquid state (off-exchange) to a liquid state (on exchanges). We can clearly see how quickly BTC became very liquid during the May sell-off as traders started to pour BTC into exchanges ready to be sold. Prior to this, we can see that the level of accumulation for BTC is quite extraordinary as BTC continuously left the liquidity pool.
Another interesting metric to follow is the total amount of the stablecoin supply vs. the Bitcoin price:
The chart above shows that, since the start of the correction, the BTC price started to drop as the stablecoin supply started to rise. In fact, the total supply of stablecoins is now sitting at fresh ATHs.
Typically, when traders exit their cryptocurrency positions, they will exit into these stablecoins, which would allow them to stay ready to re-enter the market again.
The fact that the stablecoin supply is so high suggests that there is heaps of capital ready and waiting to flood back into Bitcoin and the entire cryptocurrency market when the optimism returns.
Additionally, it seems that the long-term holders for Bitcoin continue to rise. In the past week, Long Term Holders have added a total of over 120,000 BTC to their addresses:
The fact that long term holders are continuing to increase their holdings suggests that they are growing ever more confident about the price of Bitcoin over the coming months.
Lastly, a well-respected Twitter analyst, PlanB, remains highly optimistic about the future price of BTC in the coming months. According to his Stock-to-flow model, his worst case scenario has the lowest price for BTC at $43,000 in September and a high price for the asset at $135,000 at the end of the year:
Bitcoin is below $34K, triggered by Elon Musk’s energy FUD and China’s mining crack down.
There is also a more fundamental reason that we see weakness in June, and possibly July. My worst case scenario for 2021 (price/on-chain based): Aug>47K, Sep>43K, Oct>63K, Nov>98K, Dec>135K pic.twitter.com/hDONOVgxH1— PlanB (@100trillionUSD) June 20, 2021
The recent price hike has allowed the market cap of BTC to surge back to $640 billion.
Let us take a quick look at the markets and see where we might be heading.
Bitcoin price analysis
What has been going on?
Taking a look at the daily chart above, we can clearly see that BTC had been in a short-term downtrend over the past week since failing to capitalize on the break above $40,000. It dropped lower throughout the week until eventually breaking beneath $35,000 on Monday.
Yesterday, BTC capitulated beneath $30,000 for the first time since late January 2021. The cryptocurrency continued to slide beneath $30,000 until support was finally found around $28,800, which was provided by the late-January lows.
Looking at the 4-HR chart, we can see that BTC was trading inside a descending price channel over the past week. What is interesting is that BTC never closed a 4HR candle beneath the $30,000 level. In fact, it managed to hold short term support at $31,155, provided by a .886 Fibonacci Retracement level.
The huge rejection spike toward the downside is quite promising. It suggests that buyers are waiting and ready to buy up any dips beneath the $30,000. It could be expected that a similar scenario would occur if BTC was to head toward these levels again.
After rebounding back above $30,000, BTC continued higher and went on to break the upper boundary of the descending price channel, making the end of the short term downtrend. It is now battling resistance around $34,000.
Bitcoin price short-term prediction: Neutral
Bitcoin still remains neutral in the short-term and would have to break above resistance at $42,000 to start to turn bullish again. On the other side, a closing daily candle beneath $30,000 would be required to turn the market bearish.
If the sellers push lower, the first support lies at $33,500. This is followed by $33,00, $32,250, $31,580, $30,900, and $30,000.
Beneath $30,000, added support lies at $28,775 (yesterday’s low), $27,000 (Downside 1.414 Fib Extension), $26,000, $25,000, and $24,300 (downside 1.272 Fib Extension – purple).
Where is the resistance toward the upside?
On the other side, the first level of strong resistance lies at $35,000 (short term bearish .5 Fib). This is followed by $36,675 (bearish .236 Fib), $37,500, $38,000, and $39,925 (bearish .382 Fib). Above this, $40,000 and $42,000 will provide strong resistance.