Bitcoin managed to break above the $21,000 resistance and looks set for further gains. The cryptocurrency recorded its first week in the green, when persistent selling pressure pushed it to a multi-year low of around $17,000.
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At the time of writing, bitcoin (BTC) is trading at $21,700 with gains of 5% and 12%, respectively, over the past 24 hours and 7 days.
Data from the Materials Indicator (MI) shows an increase in bid orders for the BTC price as it moves up to $22,000. The cryptocurrency held a record close to $10 million in bid orders at $21,800 and $21,500.
As seen below, these levels were previously unsafe and are likely to move further down. In the shorter time frame, it appears that investors are creating a liquidity shield for BTC price at its current levels.
The current bullish price action was preceded by an increase in pressure from BTC whales. MI data shows that these large entities have been buying more bitcoins since the beginning of July and have influenced the price of BTC upwards.
The data shows a slight reduction in buying pressure, which may indicate that BTC price will return to a consolidation phase. In order to maintain the bullish momentum, analysts at Material Indicators claim that BTC price should hold above $20,000 in the coming two days.
To gain bullish momentum, the cryptocurrency must retest the 200 weekly moving average (WMA) which is at $22,560. Analyst Michael Van de Poppe agree with On potential price consolidation before any attempt to reclaim higher levels:
Significant resistance for #Bitcoin as we speak. (Volume related to the fact that Binance added zero trading fees) Overall looks good, but wouldn’t be surprised by some minor consolidation before a major breakout occurs.
What Could Get in the Way of a Fresh Bitcoin Rally
According to economist Alex Kruger, the US Federal Reserve (Fed) is still the most significant headwind for the price of BTC. The financial institution is trying to slow inflation by raising interest rates.
However, the Fed believes any potential negative impact from interest rate increases or reductions in its balance sheet, quantitative tightening (QT), is already priced in. Thus, why is the potential for future declines potentially reduced, Kruger said. Told,
As long as inflation doesn’t turn surprisingly upward, the Fed is fine with things, and monetary policy tightening is mostly in price. Qt won’t destroy markets. Major moves require an information shock, which then leads to a change in balance.
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The next major hurdle for the price of BTC could be the earnings season for traditional companies. If stocks trade downwards as a result of the economic downturn, the already highly correlated crypto market could follow.
