What’s next for bitcoin as the cryptocurrency struggles with $24,000
by James · August 12, 2022
Bitcoin is struggling at the $24,000 level after hitting a cycle low in June and continues to rise more than 20% in July, its best month of the year. The cryptocurrency rose above $24,000 twice this week. It also reached that level in late July, but was unable to hold it before trying again this week. But while a breakout above that mark could open the floodgates for bitcoin to test the next leg up, it doesn’t necessarily have lasting implications, technical analysts say. “I think $29,000 will be very, very difficult for bitcoin to take out on the upside,” Julius de Kempenaer, senior technical analyst at StockCharts.com, said this week. “Sellers came in around $24,500 last month and buyers weren’t strong enough to push it beyond $24,500. If that happens, it would be positive in the short term, but you have to look at it in the big picture breakdown.” Bitcoin climbed as high as around $24,700 at one point on Thursday, but briefly, as investors digested two better-than-expected inflation reports. It found its lowest level in June, at $17,601.58, according to Coin Metrics, and then went on to make a big comeback in July. Since then, the crypto world has had plenty of good news to keep investor sentiment high – from positive inflation readings and Federal Reserve updates to BlackRock offering investors bitcoin trading, to the successful trial runs of Ethereum Merge planned for September. Still, there could be a lot more pain to come after this current rally, the technical analysts say, and it’s still too early to bottom. “Bitcoin is weak after completing the massive fall,” de Kempenaer said of the cryptocurrency’s 70% top-to-bottom decline this year. “All the upside that we’re seeing at the moment is taking place in recovery, so we’re going against the trend, and those are dangerous rallies because they’re very fragile.” If bitcoin breaks above $24,000, the upside potential will be limited to around $20,000, he added. On the downside, if bitcoin breaks below its June low, it could continue down to $12,500. Bitcoin “is long-term oversold, but needs support discovery and improvement in long-term momentum to suggest a major low has been made,” according to Fairlead Strategies ‘ Katie Stockton. Mid-September could be a significant turning point for bitcoin, said Youwei Yang, director of financial analysis at StoneX. For him, $25,000 is the key resistance level for bitcoin. If it pulls that off, there’s potential for a “short-term summer rally” up to the next key level to test $28,000, he said — ahead of the Federal Reserve’s Sept. 21 meeting and the Ethereum merger, which is currently slated for mid of September. Still, Yang said after the midterm elections that he expects to see much more pain extending through at least early 2023.
