Bitcoin (BTC) is pushing past recently won support levels this week as geopolitical uncertainty raises the stakes for risk assets.
After an impressive monthly close, momentum appears to be waning for Bitcoin’s latest gains, data from Cointelegraph Markets Pro and TradingView shows, and the stock markets are not helping the bulls.
Volatility was light as August began, but anxiety over a possible showdown between the United States and China over House Speaker Nancy Pelosi’s visit to Taiwan is already showing in Asian trading on August 2.
In the middle of a conversation In what can only be described as a “bear market rally”, Cointelegraph takes a look at the critical support and resistance levels the market is currently facing in short time frames.
Traders are not convinced about the fate of the 200-week moving average
Analyzing order book details on Binance, the world’s largest exchange by volume, pockets of buying and selling interest stand out immediately.
Currently, BTC/USD is eating through a bid zone just below $23,000. However, if all this liquidity is taken, there is little more to support the price action until it approaches $21,000.
The strength of the buy and sell “walls” in Binance’s order book can be deceptive, as high-volume players can quickly move bids or asks from one level to another.
The latest data was uploaded to social media by on-chain analytics resource Material Indicators on August 1. They further highlighted the importance of Bitcoin’s 200-week moving average (MA) at just above $22,800.
Some whales, Material Indicators noted, were trying to hold the 200-week MA as support, but saw little consensus from other groups of traders, resulting in a subsequent drop below the trend line.
“They don’t seem to be getting much help from other classes. Not sure how long they can keep this up,” read part of the accompanying comments.
$26,000 and then “new lows”?
Despite the situation in Taiwan unnerving markets that day, a short-term rally for Bitcoin is not off the table, even for some of its most conservative analysts.
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Per popular Twitter account Il Capo of Crypto, BTC/USD even had the potential to reach $25,000 before returning lower than current levels.
In response, fellow trader Jibon suggested that it could be $26,000 before a bearish pivot is introduced.
— Trader_J (@Trader_Jibon) August 2, 2022
While remaining silent on a possible downside target, Venturefounder, a partner in on-chain analytics platform CryptoQuant, called $22,000 a “good price” to build one BTC for a long time.
Altcoins, including Ether (ETH), looked less appetizing.
“Do I still think most altcoins are too expensive for this part of the cycle or should I say Bitcoin is too cheap?” he was asked on August 1st.
“$22,000 is still a good price for BTC to me. Can’t say the same for altcoins, not even $ETH.”
ETH/USD traded below $1,600 at the time of writing, down about 4% on the day, but still 12% higher than the same period a week ago.
“Unless you think ALTs are going to break through their ATH against BTC soon, there’s no point going long,” Venturefounder added.
Meanwhile, a look at the ETH/BTC chart shows the importance of the 0.075 resistance for ETH bulls, which fails to break during the July crypto rally.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.