Bitcoin is struggling at the $24,000 level after hitting its perceived low for the cycle in June and rising more than 20% in July for its best month of the year. The cryptocurrency broke above $24,000 twice this week. It also touched that level in late July, but was unable to hold before trying again this week. However, while a break above that mark could open the door for bitcoin to test the next stage, it does not necessarily have lasting implications, technical analysts say. “I think $29,000 is going to be very, very difficult for bitcoin to pull up,” Julius de Kempenaer, senior technical analyst at StockCharts.com, said this week. “The sellers got around $24,500 last month and the buyers weren’t strong enough to push past that $24,500. If that happens, it would be a short-term positive, but you have to look at everything in the light of the great breakdown.” Bitcoin rose to $24,700 at one point on Thursday, albeit momentarily, as investors digested two better-than-expected inflation reports. It hit its low in June at $17,601.58, according to Coin Metrics, and then made a big comeback in July. Since then, the crypto world has had plenty of good news to keep investor sentiment high, from positive inflation readings and updates from the Federal Reserve to BlackRock offering investors bitcoin trading to the successful tests of the Ethereum Merge scheduled for September. Still, there could be much more pain on the way after this current rally, technical analysts say, and it’s still too early to call a bottom. “Bitcoin is weak after completing this massive drop,” de Kempenaer said of the cryptocurrency’s 70% drop this year. “All the upside that we’re seeing right now is happening in recovery, so we’re going against the trend, and they’re dangerous rallies because they’re very fragile.” If bitcoin breaks above $24,000, upside potential would be limited to around $20,000, he added. On the downside, if bitcoin breaks below its June low, it could continue to decline to $12,500. Bitcoin “is long-term oversold, but needs a discovery of support and an improvement in long-term momentum to suggest a major bottom has occurred,” according to Fairlead Strategies’ Katie Stockton. Mid-September could be a major turning point for bitcoin, said Youwei Yang, director of financial analysis at StoneX. For him, $25,000 is bitcoin’s key resistance level. If it succeeds, there is potential for a “short-term summer rally” to the next key level to test $28,000, he said, ahead of the Federal Reserve’s Sept. 21 meeting and the merger of ‘Ethereum, which is currently scheduled for mid-September. Still, Yang said that after the midterm elections he expects much more pain to extend until at least early 2023.
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