According to analysts, Bitcoin is struggling to stay above the $24,000 level after having reached its lowest level in June.
The cryptocurrency has surged above $24,000 twice this week. But it had also reached that level in late July and was unable to stay that high before trying again this week.
However, technical analysts say that these increases do not necessarily have lasting implications.
This week, Julius de Kempenaer, a senior technical analyst at StockCharts.com, said he thinks “the $29,000 level is going to be very difficult for bitcoin to hit.”
According to him:
“Sellers reached around $24,500 last month, and buyers weren’t strong enough to push it past $24,500. If that happens, it would only be positive in the short term.”
Bitcoin rose to around $24,700 on Thursday, albeit momentarily, as investors digested two better-than-expected inflation reports. In June, the low was $17,601, according to Coin Metrics, and Bitcoin has been trying to recover ever since.
The crypto world has had plenty of good news to keep investor confidence high, from positive inflation readings and updates from the US Central Bank, BlackRock offers investors to trade bitcoin in partnership with Coinbaseuntil the successful tests of Merge on Ethereum, scheduled for September.
Still, there could be plenty more rocks on the way after the current rally, technical analysts say, and it is still too early to speculate on the bottom.
Regarding Bitcoin’s 70% drop this year, Kempenaer said that so many drops left the currency “weak.” For him, “all the rise that we are currently seeing is taking place in the recovery, so we are going against the tide, these rallies are dangerous because they are very fragile”.
Bitcoin in 2022 / CNBC
If Bitcoin sustains above $24,000, the potential for gains would be limited to around $20,000, he added. On the downside, if Bitcoin falls below its June low, could continue to fall to $12,500.
September could be a significant turning point for bitcoin, said Youwei Yang, director of financial analysis at StoneX. For him, $25,000 would be the key resistance level for the asset.
If that isn’t possible, there is a chance of a “short-term rally” to the next key level of $29,000, he said. Still, Yang said she expects to see much more pain stretch into at least early 2023.