Bitcoin: In a lower time frame, it can be quite risky to buy BTC in this area

by James · July 14, 2022

Disclaimer: The findings of the following analysis are the author’s sole opinions and should not be construed as investment advice.

Bitcoin [BTC] has traded between $ 22k and $ 19k levels for the best part of the past month. Deviations below $ 19k and above $ 22k were bought or sold within a few days of a move past these levels.

Nevertheless, the formation of an area does not indicate a phase of accumulation. In fact, back in May, after a sharp drop to $ 27k, the price seemed to consolidate around $ 30k. Two weeks into June, hopes for the bulls were brutally shattered when Bitcoin spun to $ 20.5k and $ 17.8k support.

Table of Contents

BTC- 1-time chart

Bitcoin fluctuates within a range, and sentiment in the crypto market fluctuates from euphoria to despair

Source: BTC / USDT on TradingView

While long-term investors may be wary of buying Bitcoin, shorter-term traders certainly have plenty of options. However, volatility can destroy certain bullish or bearish layouts. Visible Range Volume Profile showed that Value Area High (VAH) and Low (VAL) were at $ 22k and $ 19.3k.

This meant that a retest of both levels would be a good place to sell or buy the asset, respectively. Point of Control (PoC) represented the level at which most turnover, by volume, took place. It stood at $ 21.6k.

Also, $ 20.2k- $ 20.8k was a supply zone for Bitcoin in shorter time frames.

Rationale

Source: BTC / USDT on TradingView

The indicators also supported the idea of a range for Bitcoin. Over the past month, the Relative Strength Index (RSI) went from oversold to overbought, but a significant break in the market structure was not seen. Instead, the price has stuck between $ 22k and $ 19k levels.

At press time, the RSI pushed back above the neutral 50 mark. Similarly, the Awesome Oscillator (AO) also climbed above the zero line to show that the momentum was stronger.

On-Balance Volume (OBV), on the other hand, did not see a significant outbreak. Like the price, OBV has also been stuck within an area in the last month. However, the last hours of trading have had a significant buying volume on OBV.

Conclusion

While the return from the $ 19k decline was supported by some demand, there were no signs of an outbreak from the series yet. The center of this range was $ 20.6k, right in the middle of a stiff resistance zone.

In the lower time frames, it can be quite risky to buy Bitcoin in the range of $ 20.2k- $ 20.8k. Instead, a retest of VAH or VAL can be used to sell or buy.