Bab 28 06/15 BTCUSD: Both Bulls and Bears Have Trading Opportunities, Focus on Buying the Dips
Summary: Within a week of the U.S. Securities and Exchange Commission (SEC) filing a lawsuit, the cryptocurrency market cap has experienced a significant drop to its lowest level since mid-March in the past 24 hours. During that time, the crypto market had seen a rise in response to concerns about U.S. banks.
Fundamentals
Within a week of the SEC filing a lawsuit, the cryptocurrency market cap has dropped by 3.2% in the past 24 hours to $10.21 trillion, reaching its lowest level since mid-March. Leading the decline are a total of about 60 assets such as ADA, BNB, MATIC, and other crypto assets that the SEC classifies as securities. Even the enthusiasts of cryptocurrency giants BTC and ETH have been affected by this downturn.
Republican Representative and Chairman of the House Financial Services Committee, Patrick McHenry, said the SEC should have taken strict action against the Binance exchange long ago. He said it should have been shut down years ago.
Bitcoin prices fell below $25,000 at the open on Thursday, down 3.6%, while Ethereum fell to $1,640, down 5.4%. The decline in major altcoins ranged between -0.45% (Tron) and -6% (Litecoin).
Nevertheless, as cryptocurrency exchanges have been targeted by regulators and the banking system has managed to avoid any new high-profile failures, the situation could be reversed.
Bitcoin has fallen back to a local resistance level from last August to February of this year. The bulls may be trying to keep the sell-off near that level, but the current decline is still within the downside channel that has been in place since April. More significant support for Bitcoin is near the 200-day SMA. It currently stands at $23,600 and points higher.
Technical Analysis
The Bitcoin price has been forming a pullback structure from its highs after peaking at an 11-month high of $31,048 in mid-April. The price is currently testing the previous starting point, and if the bears stop here, it will provide new directional momentum.
Momentum indicators are now fully in negative territory after the sharp drop in Bitcoin price over the past 24 hours, but they also suggest a rising momentum. Specifically, the stochastic oscillator is forming a bullish crossover near the 20 oversold mark, while the RSI has risen slightly below the 50 neutral mark.
If the bulls manage to push the price higher into the middle section of the descending channel connecting recent highs, they will encounter resistance in the short term around the selling initiation point of $26,069. A break above that level would allow the bulls to test the upper edge of the descending channel, currently in the $26,900 range. Further gains would challenge the psychological level of $30,000.
Alternatively, bearish action could trigger a further price pullback to the $24,300 level. If that range collapses, the focus could shift to the $23,207 area. Even lower, the $21,375 handle would provide downside protection.
Overall, Bitcoin price has been consolidating sideways over the past week, and a brief significant retracement could trigger aggressive buying interest. Meanwhile, short-term oscillators indicate a slow strengthening of bullish momentum but also suggest a continued downside correction. Therefore, a clear breakout of the descending channel is needed to revive the bulls' hopes for a trend reversal. In terms of strategy, buying the dips remains the primary approach.
Trading Recommendations
Trading Direction: Long
Entry Price: 24300
Target Price: 30,000
Stop Loss: 23500
Valid Until: 2022-06-29 23:55:00
Support: 24741, 23960, 23569
Resistance: 25271, 26069, 26429
