Over the past week, Bitcoin bulls appeared to have taken control of the price, eventually bringing it back above $73,000. There has been a slowdown since then, with bears attempting to retest the $70,000 level over the weekend. For now, the bulls are still open, but there is always the possibility that the price could collapse again. To this end, Bitcoin price must maintain an important support level if the bulls are serious about maintaining the uptrend.
Bitcoin’s magic point is $70,500
After the initial rejection from the range highs, Bitcoin price is now moving towards a crucial level. According to crypto analyst Max Trades, it is now heading towards the next major support level for the bulls to hold. This level sits at just $70,500, serving as the main support since the uptrend began.
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It is important to maintain this key support level as it will determine whether the uptrend continues. The top of the range still sits above $72,000 at present, so this is where the bears are putting up the most resistance. Thus, the price will need to break the top of the range to continue rising, or break key support to resume the downtrend.
Another major factor driving the price down is the fact that there is still a CME deficit that has not yet been filled. This CME gap sits below $67,000, making it a magnet for bears. Given this, if Bitcoin price eventually breaks key support at $70,500, it would begin to weaken the bullish structure that began to manifest last week.
Pushing towards the CME gap would mean a break below $67,000, pushing towards $66,000 to bottom. However, even this would not determine that this is the bottom point of the downtrend, as there is the possibility of a further push down to obtain more liquidity.
The main liquidity levels are below $65,000, which is where whales could push to get the most out of this move. This means that in the event that the key support is broken, it would only be the beginning of the trend. The eventual move would be a cascading event that could push it down even further.
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However, the crypto analyst explains that the Bitcoin price is not bearish at the moment. This is because the price remains range-bound and trading above the key support level keeps it here. “An important point to keep in mind is that BTC is still range bound, and as long as that remains the case, price will be primarily liquidity driven, chasing both sides.”
Featured image of Dall.E, chart by TradingView.com
