The Bitcoin price is up five percent when writing–a few hours after the network automatically changed the mining difficulty by 28 percent—the largest single drop since 2011.
The adjustment was highly anticipated, considering the immediate expansion of prices from around $33.9k.
Technically, BTC/USD prices remain in range, capped between a $12k zone with resistance at $42k on the upper end and $30k as psychological support.
Bitcoin Market Performance and Structure
As we advance, the immediate and medium-term trend depends on whether BTC prices will expand above $42k or continue to range in a possible accumulation.
Notably, and perhaps a concern for traders, BTC bulls’ inability—regardless of positive fundamentals streaming in—to overcome the May 19 bear bar.
From a volumes analysis perspective, Bitcoin prices are bearish as long as they range inside May 19 candlestick.
As such, the past six weeks’ horizontal movement could—especially if BTC lacks support—turn out to be a distribution.
Several indicators point out this likelihood (as a caution for optimistic bulls)—and one that stands out is the tapering trading volumes (participation).
What’s more, BTC/USD prices are technically trending inside a descending channel.
As such, the formation of an unmistakable uptrend valid only if there is a sharp spike in trading volumes behind a preferably wide-ranging bull bar.
Again, ideally, this should be above the minor resistance trend line capping the descending channel.
A Rare Bullish Divergence Forms
Propping Bitcoin bulls, according to Lark Davis, is the formation of a bullish divergence pattern.
#bitcoin setting lower low on price, and higher low on the RSI.
Juice for the bulls pic.twitter.com/klQPe6zR66
— Lark Davis (@TheCryptoLark) July 2, 2021
Reading from the daily chart, BTC/USD prices are trending lower while the RSI is pulling up from the oversold territory, inching higher.
Bullish Divergence on the daily RSI doesn't happen very often. Last two times it has pumped one of these was the bear market low. https://t.co/3AnUvxeiA1
— anontoshi (@anontoshi) July 2, 2021
Traders are confident this spells good news.
For one, this price pattern doesn’t form often, and when it does, BTC prices tend to tear higher.
And other traders also appear to agree that BTC/USD will spring higher in the days ahead. For one, the Wyckoff Pattern is also valid.
— Digital Asset Specialists (@da_specialists) June 30, 2021
Although BTC/USD prices may track lower to $26k for the spring to form before another rally towards $60k.
The path towards a retest of 2021 highs would be fast-tracked if BTC breaks above $34.5k as per Wyckoff trading pattern:
#Bitcoin The previous Breakdown and Breakout bars occupy the same price level – 32,750-34,500. The reaction to this area is non-threatening so far. This suggests at least an attempt to rally. 34,500 is the level to overcome and hold. Let's see what happens. pic.twitter.com/D4tpRxJaBP
— Wyckoff Analytics (@WyckoffAnalysis) July 2, 2021
Bitcoin Bulls Lighting Up, $36k to $40k a Broad Resistance Zone
Back to the intra-day charts, BTC/USD prices appear ready for more gains as per Crypto Rover’s analysis.
Specifically, in the 1-HR chart, bulls are taking charge and could highly likely edge past $34k—this week’s highs—as bulls awaken.
Scalping traders can target the height of the wedge, placing that level at around $35k.
Crypto World on YouTube observes increasing upside momentum in the hourly charts.
He identifies BTC price higher highs as RSI turns from oversold territory in the 1HR, 2HR, and 4HR charts. These are all precursors for bulls to take over—even from Wyckoff’s perspective.
However, there could be more growth on the table for BTC/USD if prices edge past $36k—the trader’s first target. BTC may surge to $38k—a Fibonacci level—and later $42k—a critical resistance level.
Still, any break above these marks ought to be with sufficient trading volumes to confirm participation.
Charts courtesy of Trading View
Disclaimer: Opinions expressed are not investment advice. Do your research.
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