The systematic and consistent movement of the narrow range reached its logical result on July 20. The quotes of the BTC/USD pair broke through the key boundary of the horizontal line and continued the downward movement. The cryptocurrency is clinging to an important support level that was formed before the previous sharp market crash. The local task for BTC is to complete trading above the $29,800 mark, while the market continues to consolidate.
The main reason why it is vital for bitcoin to complete trades above the current support level is its interpretation by the market. The last powerful collapse of the crypto market, which occurred on June 22, ended at this point. For the market, the $29,800 mark became a kind of point of no return, where many investors set stops and put options. In other words, if bitcoin breaks through this boundary and ends the trading day below the current price range of fluctuations, it will significantly aggravate the sell-off among mid-term and short-term players. Given the gradual lifting of the ban on the sale of Grayscale shares, a quick breakdown of the $29,800 threshold can trigger a powerful bearish impulse, which will shift the BTC fluctuation range to the region of $20,000-$25,000.
The fall of bitcoin quotes below the horizontal support zone of $30,000 was the logical end of the constant bearish pressure on the market. Given the lack of positive news and the worsening sell-off, bitcoin quotes will continue the downward movement to $25,000, bypassing local support zones. However, as of 11:00 UTC, the cryptocurrency is confidently approaching $29,800 thanks to the positive dynamics of the price movement on the two-hour chart. Despite this, it looks like a daunting task to completely win back the fall in bitcoin.
Over the past day, BTC sank 5%, and the current daily trading volume of $24 billion continues to put pressure on the coin's quotes. The RSI indicator on the four-hour chart is above the 50 mark, which indicates a possible increase in interest in the asset. In the long term, this may become a signal to buy back the current price drop. At the same time, the MACD indicator continues to decline and gives bearish signals.
Even though BTC/USD shows resistance in the short term and buyers are trying to sell the asset beyond the safe zone, the situation is taking on a bearish color. Most likely, bitcoin will be able to complete the current trading day above the $29,800 mark, but this level will be broken over the next few days. The situation will worsen amid fundamental negative news. In the US, they continue to actively speculate on the topic of cryptocurrency regulation, and the prolonged price consolidation is alienating the retail audience. Do not forget about the historical context, according to which August is one of the worst months for the first cryptocurrency.
All this affects market participants, as evidenced by the fall in the price of bitcoin futures below the current spot price on some crypto exchanges. This indicates a loss of confidence and panic among investors. The Fear and Greed Index dropped to 19, which also increases the number of ill-considered and illogical actions on the part of investors. Ultimately, a combination of negative factors, multiplied investor skepticism and bearish pressure will shift the BTC fluctuation corridor to $23,000-$25,000.
However, there is still room for a rebound. When bitcoin reaches a fluctuation range of $23,000-$25,000, the drop in quotes will reach 15%-20%. These indicators are the entry point for new players who can stir up the market. An influx of speculators, retail traders, and institutions could trigger a surge in bitcoin buying and trigger a bullish breakout. However, such a scenario requires a positive news impulse, which is not observed in the market.
In the near future, we should expect a breakdown of $29,800, after which the coin will begin a sharp or smooth (depending on market behavior) movement to the fluctuation zone of $23,000-$25,000. The subsequent change in the BTC/USD quotes will depend on the news background, market sentiment, and the general level of interest in cryptocurrencies.
