Bitcoin Bulls Defend $23,000 Amid Bear Market Rally ‘Alive and Well’ Warning
Bitcoin (BTC) tested $23,000 as support at the August 1st Wall Street open with key moving averages in focus.
The 200-week moving average gets a lot of attention
Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as bulls and bears battled for control in a tight trading range.
Bitcoin had inspired with its highest weekly close since mid-June the day before, with its monthly candle also posting its biggest gains since before last year’s $69,000 all-time highs.
Among analysts and traders, however, it was the market’s ability to hold higher for several candles that mattered.
Despite regaining important trend lines such as the 200-week moving average (MA) and realized price, Bitcoin would not be out of the woods until it started producing full weekly candles without retests of these levels.
“Bear Market Rally Still Alive,” chain analysis resource Material Indicators explained on the day.
“To call it something else requires confirmations of valid breakouts above the key MAs. 200 week and 50 month are the first to be considered for BTC, but only if we have full candles above the line. A week below invalidates.”
As such, $22,880 and $21,965 were important lines for bulls and increasingly close to the spot price.
Fellow trader and analyst Rekt Capital nevertheless predicted that Bitcoin would naturally try to test the 200-week MA as support in the near term.
The new #BTC Weekly close above the 200-week MA means price will try to test this MA as new support this week
BTC already had the MA as support last week as evidenced by the downside week
Now it will try to hold it for the second week in a row$BTC #Crypto #Bitcoin pic.twitter.com/350VYgi825
— Rekt Capital (@rektcapital) 1 August 2022
Commenting on the price strength, but he noted that the 200-week MA recovery was the first such event following an “extended downtrend” since the March 2020 COVID-19 crash.
“Bitcoin may be struggling to break above the $24,000 level, but the weekly candle finally closed above the 200-week moving average, and that could significantly improve technical sentiment,” Zain Haider, co-founder of Blockchain Q&A platform Answerly, in summary in the additional comment.
Activity in the chain “at its best”
With US stock markets flat on the day, Bitcoin and altcoins had little macro pressure affecting price action.
Related: Best Monthly Gains Since October 2021 – 5 Things to Know in Bitcoin This Week
However, the situation remained somewhat uncertain, warned researchers at chain analysis firm Glassnode, thanks to markets still reflecting the bearish sentiment after months of downtrend.
“Both Bitcoin and Ethereum have seen a rally in prices this week, on the back of extremely oversold conditions, spurred by risk-on sentiment following the July FOMC meeting,” they concluded in the latest edition of Glassnode’s weekly newsletter, The Week On-Chain.
“Under the surface, however, on-chain transactional demand remains lackluster at best, and this recovery has yet to see a convincing follow-up to observable demand activity.”
Glassnode added that data on the chain still represented “only part of the picture”, and that attention should similarly now be directed to whether the new signs of change can persist.
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