In a tug-of-war between buyers and sellers over where Bitcoin should go, its price has held steady above $20,000 this week. But the weekend could be decisive.
BTC/USD ends August on a bearish note. Moods in global markets deteriorated after Powell’s speech at the Jackson Hole Symposium on Friday last week.
While this deterioration is best seen in the equity markets, other risk assets, such as cryptocurrencies, are also suffering. After a brief relief yesterday, Bitcoin is making another attempt to offer a decisive break below the $20,000 area.
The most famous crypto-currency has been trading in a range of $19,500 to $20,500 in recent days, which is more or less equal in size to the previous upward correction of the current downward momentum that began on August 15, 2022.
The boundaries of this range are key short-term levels to watch as a break above the upper boundary would, at least in theory, hint at a possible uptrend reversal, while a break below the lower boundary would mean painting a lower low in the current short-term downtrend structure.
The BTC price has continued to show resilience. Buyers need to at least break the $20,500 area (the high for the week) to push higher.
BTC is now below this weekly resistance. On the hourly chart (H1), we see indecision with a trading range forming between $20,500 and $19,500.
Support to be observed $19,500 – $19,000
According to NewsBTC, $19,000 serves as a weekly support for the price of BTC. It bottomed out at $19,500; since then, it has recovered and traded above $19,000, resisting attempts by sellers to push the price lower.
The BTC price has shown remarkable relative strength despite the recent rejection of the $20,500 level, not breaking above the $19,000 support area, as it could skid lower from $19,000.
Support at $20,000 also continues to act and push the price higher even as Bitcoin has marked lows below that level.
On the 4H chart, there is a bullish divergence with the RSI, even though it is a reversal pattern, it has become less relevant due to the extended range Bitcoin has already established for some time.
The next direction for Bitcoin will be determined by the breakout of the range between $20,500 and $19,500.