Is a Bitcoin Flash Rally Above $30,000 Plausible?

Is a Bitcoin Flash Rally Above $30,000 Plausible?

Key Insights

  • Bitcoin has been trading sideways below $30,000 for the past few weeks.
  • There is a growing sense of frustration among investors, as the price of Bitcoin has been unable to break through the $30,000 barrier.
  • Some analysts believe that BTC could fall to $25,000 soon.
  • Others believe that Bitcoin is due for a correction, which could take the price down to $27,200.
  • If BTC does correct, it could then rally to $35,000.

Bitcoin continues to wallow below the $29,500 zone as the days go by, and investors are starting to vent out their frustration.

Sometime over the last 24 hours, TradingView data shows that Bitcoin entered a flash rally towards the $30,000 zone, but sunk right down below $25,500 again, in a matter of hours.

Bitcoin price action
Bitcoin price action

Santiment, of course, had something to say about why BTC behaved this way, and what it might be up to in terms of price.

In this article, we will go over everything that's happening with Bitcoin, where it is headed on and off-chain, and what the chances are of a rally sooner or later.

Let's first analyze…

Bitcoin's Rise And Fall Above $30,000

As mentioned earlier, Bitcoin's behaviour has been very strange as of late. Asides from the recent sluggishness, the way it continues to flirt with the $30,000 zone and the apparent frustration investors are starting to show, BTC rallied to the $30,000 zone once again on Wednesday this week.

This should be good news. Only that it wasn't.

Right after hitting this price level, the cryptocurrency promptly reversed course and fell straight down to $29,300 again.

Santiment, however, may have an idea as to what is going on.

According to the blockchain data analysis firm in a recent tweet, BTC had assistance from the "many traders" who gave up during the past week of BTC's sluggishness and price declines (not that anyone blames them).

Santiment's Bitcoin analyses
Santiment's Bitcoin analyses

Santiment also mentioned in the tweet, that Bitcoin's volumes are rising in August, and that the sentiment on BTC may turn positive soon.

However, BTC rising to the $30,000 zone may have been good news if it hadn't tried and failed several times to rise fully above this price zone before.

This may be all the confirmation the bears need, to realize that they may have successfully trapped the bulls under the $30,000 zone.

This is without mentioning how the daily RSI shows a disturbing signal:

Bitcoin's RSI bearish crossover
Bitcoin's RSI bearish crossover

A close look at the RSI shows that the RSI-based MACD (purple) is on the verge of breaking the RSI line (yellow) to the underside.

This is known as an RSI bearish crossover and may be a disturbing tell-tale sign of red days for Bitcoin.

Could BTC Indeed Fall To $25,000

Analyst opinions about BTC falling to $25,000 aren't new.

However, this time, the threat may be a little more real than ever before.

Capriole Investments, in a recent report, highlighted that Bitcoin may not be ready yet for a rally above $30,000.

In this report, the firm noted that BTC's price action as of late are "technical bearish confirmations".

Bitcoin's possible fall to $25,000
Bitcoin's possible fall to $25,000

The Capriole Bitcoin Macro Index, which incorporates more than 40 of the most potent metrics into a single machine learning model, indicates that BTC has been seeing "an increasing rate of contraction"

The analytics firm went further to say that "the technicals and fundamentals were telling us to be cautious with Bitcoin. However, caution has now turned into bearish confirmation with the $30K range breakdown"

Capriole Investments finished by saying that the BTC market is in a new downtrend until technicals or fundamentals prove otherwise.

The nearest points of technical opportunity, the report says, are $28,000, $25,000 and $21,000.

What Are The Chances Of A Possible Rally Soon?

There are other more optimistic opinions on BTC.

According to a recent tweet from CryptoCon, a BTC and general crypto technical analyst, Bitcoin going much lower has become unlikely.

In the analyst's opinion piece, he used an envelope indicator on BTC.

Envelopes are like Bollinger bands. They are typically made out of moving averages, and serve as a kind of dynamic support and resistance line.

CryptoCon's BTC envelopes
CryptoCon's BTC envelopes

According to the analyst, the midline of the envelope above is one of the most important bull market supports.

This midline held up throughout 2015 and 2017. And if the same happens now, BTC may be unable to trade lower than it currently sits.

Bitcoin, in the daily chart, however, continues to test the $29,200 zone.

At this point, it becomes hard to picture BTC being able to keep itself above $29,000.

Bitcoin's price action
Bitcoin's price action

The cryptocurrency has broken through the midline of its daily chart's Bollinger band and is now facing a real breakdown of the lower support.

What are the chances of a rally from here?

Sadly, BTC looks more bearish than bullish. At least from the short to medium-term perspectives.

Bitcoin's ascending trendline
Bitcoin's ascending trendline

Take a look at Bitcoin's zoomed-out version of the daily chart above. We can see that the larger ascending trendline is still very much in focus. This means that BTC, according to the larger picture, is bullish.

For BTC to rally again to the upside, it may need to enter a healthy correction. Bitcoin may first need to touch this trendline again, to realign itself – Before thinking of another rally.

Bitcoin's possible 7% dip
Bitcoin's possible 7% dip

If a correction indeed happens, it might take BTC down by 7% or thereabout, to the $27,200 zone.

However, with the fresh momentum the cryptocurrency gathers from this correction, it will finally have the strength to rally straight up, break the $30,000 – $32,000 zones, and complete a +25% move to the upside, before stopping around $34,500 – $35,000.

BTC's Rally to $35,000
BTC's Rally to $35,000

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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