Bitcoin Price Movement Analysis for 6th July, 2021

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A recent post speculated on the potential of Bitcoin being in a Wyckoff Accumulation as its price approaches a return to the $40,000 level. While traders anticipate BTC’s return to its April highs, its short-term direction remains uncertain. Bitcoin was trading at $34,783 at the time of writing, up 1.7 percent in the previous 24 hours.

Bitcoin 4-hour chart 

The reset of BTC on June 22 and its subsequent steady ascent resulted in the construction of a symmetrical triangle, from which there are about equal possibilities of a breakout in either direction. This pattern’s top trendline corresponded with the 4-hour 200-SMA (green), the 38.2 percent Fibonacci Extension ($35,629), and the 12-hour 50-SMA (not shown). As a result, a closing above this zone might ignite a swing to the upside, perhaps reaching the 50 percent Fibonacci Extension and the swing high of $36,617 set on June 29. To invalidate this conclusion, sellers can aim for a drop below the swing low of $32,717 on July 2nd, which would result in a breakdown from the pattern.

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Reasoning

Despite gains made since yesterday, bullish momentum was actually receding in the market as per the Squeeze Momentum Indicator. However, a squeeze was currently in effect and volatility could remain low over the coming sessions. The Directional Movement Index was still suggestive of a bullish trend as +DI maintained above the -DI.

However, an ADX value of 15 indicated that the market was less directional, suggesting that some lateral movement was possible. Although the Relative Strength Index remained in neutral zone, a down-channel was a concerning indication. This showed that the market had weakened in the previous week.

Conclusion

A jumble of indications makes determining BTC’s next resting zone in the coming days difficult. However, its short-term movement might remain sideways and between $34,000-35,000, with a minor possibility of a rise towards its 50 percent Fibonacci Extension at $36,850 before the next downturn.

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