Bitcoin Faces Pivotal Test As Bulls Aim To Reclaim Key Support

The world’s largest cryptocurrency, Bitcoin (BTC), has struggled to maintain a foothold above the critical $60,000 price level in recent trading sessions, as the digital asset finds itself caught in a tug-of-war between bullish and bearish forces.

After recovering from a dip below $49,000 earlier this month, Bitcoin has been vacillating around the $60,000 mark, unable to consolidate above this key psychological and technical threshold. 

This price level has emerged as a battlefield between the bulls and bears, with the outcome poised to have significant implications for Bitcoin’s near-term trajectory.

Bitcoin Faces Decisive Test At $60,000

According to market analyst Mark Cullen, Bitcoin’s ability to reclaim and hold above $60,000 by the end of the day could pave the way for a move higher towards the mid-to-high $60,000 range. 

However, should Bitcoin fail to decisively push through the $59,500 level, Cullen warns that the technical outlook could turn more bearish, with the potential for a sweep of the August 7th low.

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Further complicating the continuation of the price recovery witnessed the past week after the August 5 market crash, is the presence of a sizable 1,000 BTC sell order currently protecting the $60,500 level, as noted by crypto analyst InspoCrypto. 

According to the analyst, a failed retest of this resistance zone could potentially catalyze the formation of a bearish double top pattern, which would be a concerning development for the bulls in the near term price action. InspoCrypto said:

The $60,500 level is currently protected by a 1,000 BTC sell order. A failed retest of Bitcoin at $60,500 could potentially complicate the situation. Technical analysts might identify a double top formation in such a scenario.

Moreover, the latest updates on the options data do not paint an entirely optimistic picture for Bitcoin in the short term, according to InspoCrypto, who emphasized the need to closely monitor the situation.

Worst-Case Scenario For BTC

According to crypto analyst Daan Crypto Trades, the fact that Bitcoin is currently trading above the $59,000 mark is a positive sign, as it represents a return to the asset’s Daily 200-Exponential Moving Average (EMA). 

However, Daan Crypto Trades noted that the real test for the bulls will come at the $63,000 level, which corresponds with the cryptocurrency’s local highs. “It’s an important level to break for the bulls to get the party started,” the analyst stated. Should Bitcoin fail to decisively surpass this resistance, the bears could regain control, with the $56,500 level serving as a potential support zone.

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Fellow technical analyst EmperorBTC echoed a similar sentiment, highlighting the significance of Bitcoin’s ability to reclaim its “macro range” and the resistance at the $62,200 level. 

The analyst advised against opening fresh long positions at current levels, instead suggesting that traders should look to “bid on pullbacks near the weekly VWAP (Volume-Weighted Average Price) at $58,800.”

In a somewhat more cautious tone, EmperorBTC also acknowledged the possibility of a worst-case scenario, wherein Bitcoin could potentially retrace to the $52,000 level. However, the analyst emphasized that this would be a “gift to buy and hold” in the lead-up to September, hinting at the possibility of a more favorable market environment in the coming months.

Featured image from DALL-E, chart from TradingView.com