21.07.202115:03 Forex Analysis & Reviews: BTC bounced past $30,000 mark thanks to a double bottom: is it worth talking about a trend reversal?

July 20 can absolutely justifiably be called the day of the next cryptocurrency market collapse. Major coins reached their lows and showed preconditions for further declines beyond important support lines. At the same time, on short-term technical indicators, many assets, including bitcoin, showed bullish impulses. The main cryptocurrency risked breaking through the $29,000 mark and exacerbating the downward movement. However, a double bottom formed on the bitcoin charts, thanks to which BTC was able to rebound to $30,900.

As of 10:00 UTC, the first cryptocurrency crossed the $31,000 mark, having risen in price by 5.5% per day. The market capitalization of the coin increased to $584 billion, and the daily trading volume reached $22.5 billion. Bitcoin continues to show solid growth, as evidenced by the local dynamics of the price movement, which is at the level of +1%. The main technical indicators of the asset in the short term point to the possible formation of a powerful bullish breakout. The result of such a sharp spurt in the BTC/USD pair quotes was the formation of a double bottom relative to the local low formed on June 22. Thus, the formation of a technical figure on the charts took place within a month, which indicates its reliability and stability. At the same time, it is too early to talk about a full-fledged trend reversal, since the market needs to show the maximum reaction to a positive impulse.

In addition, bitcoin will have to overcome several key resistance levels and ultimately break through the main psychological boundary at around $40,500. In addition to the main mark, BTC needs to successfully test the $31,250 mark, possibly today. As of 10:00 UTC, the cryptocurrency confidently crossed the $30,125 mark and came close to the next important mark. Among the nearest local resistance levels, it is also worth highlighting $31,800 and $32,600. Upon overcoming these pressure lines, bitcoin has every chance to reverse the movement to the key level of $36,000. If the coin manages to break through this line as well, then the key horizontal resistance line and the median line of the range will be passed, which will significantly reduce the pressure on the BTC quotes.

At the same time, the technical indicators of bitcoin show bearish signals in a wider range. Even though the stochastic formed a bullish intersection and rushed up, the MACD indicator is below the zero mark, and the RSI is beyond the 80 mark. However, the current situation indicates that bitcoin will be able to break through the downward resistance line, which will mark a bullish reversal. This is also indicated by positive shifts in the on-chain indicators of bitcoin. Since May, the tendency to accumulate coins has continued to grow.

Over the past month, the outflow of bitcoins from cryptocurrency exchanges amounted to 36,300 coins. At the same time, mining companies are beginning to restore their shares of accumulation in BTC and do not create downward pressure on the quotes of the coin. According to Glassnode analysts, in a few months, more than 80% of the market supply for cryptocurrency will be on the wallets of whales. In the future, this will significantly reduce the pressure on the asset from sellers. In addition, ARK Invest brought an additional positive to the market, which bought 140,000 shares of Grayscale Bitcoin Trust and the Coinbase cryptocurrency exchange.

Thanks to a successful combination of circumstances, bitcoin managed to break out of the local descending zone. In the next few days, the cryptocurrency will have to overcome several extremely important resistance lines. An important role in this should be played by market participants who reacted to the positive impulse but did not fully implement it. Market actions will become key over the next few days, as indicators of social activity and daily trading volumes remain at a low level. However, taking into account the powerful rebound of cryptocurrencies and bitcoin, as well as positive news impulses, BTC has every chance to reverse the movement and launch a bullish trend.