on July 8, Bitcoin reached a monthly high of $22,500. Bullish momentum built over the course of the week and small gains were seen. Although the second quarter of 2022 ended with a 57% correction for BTC, part of the industry was optimistic that the bottom had been reached. While multiple analyzes suggest that direction, the current pattern is less favorable.
Bitcoin daily chart
At the time of the press, Bitcoin consolidated nearly $20,500. While BTC has remained above the recent low of $19,000, the current pattern is taking the form of a bearish flag. On the daily time chart, Bitcoin has registered a number of higher highs and higher lows within a parallel channel after a significant drop in value towards the end of June. As observed and identified in the chart, it is currently moving towards a bearish breakout.
Trading volumes also point to increased selling pressure. On July 8, after BTC hit the local high, the asset closed its daily candle to a negative point, marking the highest trading volume since April. A deviation from the lower trendline is possible at this point, but a pattern break would trigger a retest between the $16,400 and $17618 range.
The relative Strength Index or RSI has also been bearish since late April and the indicator has not crossed 50, indicating higher sell intensity in the exchange. Likewise, Awesome Oscillator was also dominated by bulls, but there were also signs of reversal.
A silver lining for support?
While the technical side of the market is still optimistic for Bitcoin, the on the chain lace can convey a little hope. Between $19,145 and $20,358, BTC has more than 1 million addresses invested in about 800k BTC. It’s a strong support that may hold, as retail sales pressures have mostly eased since last month. However, the support weakens after $19,173, and a collective correction below that range would undoubtedly bring Bitcoin near $15,000.
After a bullish week, Bitcoin’s resilience will be tested again and bears could try to regain the upper hand on the asset.