BTC price holds support at $21,500, but analysts warn that the overall trend is bearish
Bitcoin (BTC) and the wider crypto market experienced slight gains on Wednesday, as a relatively uneventful day on the news front kept markets calm ahead of Friday’s Jackson Hole summit.
Data from TradingView shows that an afternoon attempt by Bitcoin bulls to push its price higher was soundly rejected by resistance at $21,900, resulting in a pullback to support at $21,750 marking a 1.14% gain on the 24-hour chart.
BTC/USD 4-hour chart. Source: TradingView
The strong wall of resistance at $21,900 is evidence that bears continue to have the upper hand as noted by Kitco Senior Market Analyst Jim Wyckoff, who said that “Bears have the slight overall near-term technical advantage,” in his morning Bitcoin update, which emphasized that prices have paused this week.
According to Wyckoff, “The pause has also produced a “collapse in volatility,” which suggests a bigger price move is on the horizon. Technical odds favor that bigger move being on the downside.”
Can support hold?
The lackluster breakout attempt by Bitcoin was touched on by independent market analyst Michaël van de Poppe, who posted the following Tweet highlighting the importance of support at $21,500 holding in order to prevent a price move lower.
Breakout on #Bitcoin here, as it broke above the range-high, but nothing special as #altcoins are losing against $BTC.— Michaël van de Poppe (@CryptoMichNL) August 24, 2022
Need to see if another HL can be made and/or $21.5K can hold as support. pic.twitter.com/oLnauf0eR6
What Poppe is now looking for is the establishment of a higher low (HL) which would signal that the uptrend remains intact, while a breakdown below $21,500 could lead to a retest of support at $21,100.
A word of caution was offered by Cubic Analytics Senior Market Analyst Caleb Franzen, who posted the following tweet highlighting that the structure on the Bitcoin chart “has been clear for the past 9 months.
#Bitcoin structure has been clear for the past 9 months:— Caleb Franzen (@CalebFranzen) August 24, 2022
Downward extension, consolidation, downward extension.
Need to see a change in this dynamic before becoming short-term bullish. pic.twitter.com/NZbJQg6AG5
From Franzen’s perspective, there’s no sense in getting bullish in the short-term unless this downward trend reverses.
Altcoin market trades flat
The altcoin market, likewise, had a rather uneventful day on Wednesday, with the only real fireworks coming as a result of U.S. President Joe Biden announcing the forgiveness of $10,000 worth of student loans for Federal borrowers. Biden will also cancel up to $20,000 for recipients of Pell Grants.
Daily cryptocurrency market performance. Source: Coin360
The overall cryptocurrency market cap now stands at $1.117 trillion, and Bitcoin’s dominance rate is 39.9%.