Bull Traps Puts $BTC Price at Risk of Prolong Correction

Affected by the massive growth of the 5th largest cryptocurrency XRP, the leading coin Bitcoin witnessed intense buying pressure on July 13th. With a strong bullish candle, the buyers breached the range resistance of $31500, luring awaited buyers for the potential of uptrend continuation. However, the buyers could sustain higher prices which lead to a massive red undermining the bullish thesis. What’s next?

Also Read: Bitcoin (BTC) Set For $35000, Ethereum (ETH) Above $2000 As US CPI Inflation Falls

Bitcoin Price Daily Chart

• The $31500 level persists as a strong resistance zone for the BTC price.
• The 20-day EMA dynamic support maintains a high momentum recovery
• The intraday trading volume in Bitcoin is $17.3  Billion, indicating a 34% loss.

Source-Tradingview

On July 14th, the Bitcoin price projected a long red candle that engulfed the buyer’s candle used to break the $13500 barrier. The sellers’ candles destroyed buyers’ weapons of breakout indicating a scenario of a bull trap which may flood more supply pressure as hasty buyers may get liquidated. 

Thus, the coin price reenters the range boundaries stretched from $31500 to $29630. The Bitcoin price currently trades at $30461, but with sustaining selling it could plunge 2.75% to reach $29630 support

The price behavior at the aforementioned support would be crucial to check whether the prevailing recovery is intact, or whether BTC could witness a longer correction to $28460.

When BTC Price Can Escape the Sideways Trend?

The fake breakout from $31500 accentuated this level as a high supply zone. On the other hand, if the BTC price showed sustainability above $29630 in the coming days, the coin holders could witness a prolonged sideways trend. Therefore, a genuine breakout from either of the range pattern is needed to determine the near future trend for Bitcoin.

• Bollinger Bands: The upper and lower band of the BB indicator aligned with range levels gives extra weightage to them.
• Moving Average Convergence Divergence: The MACD indicator slope in a negative crossover state indicates the sellers actively influencing the Bitcoin price.