Bitcoin price analysis: BTC/USD recovers from recent lows, but the worst is not over, Fundstrat's tech analyst says
|- BTC/USD settled above $7,600, but the upside momentum is weak.
- Fundstrat's expert says Bitcoin may be on the verge of collapse.
Bitcoin is changing hands at $7,641 after having tested $7,460 low on Wednesday. While the cryptocurrency market seems to have settled down after a strong downside movement, buyers are still nowhere to be seen.
The digital coin No.1 hit a one-month high at $8,488 on July 24 before the rally gave way to bearish correction, which resulted in over 10% price fall. It seems that SEC's decision to reject Bitcoin ETH proposal, submitted by Tyler and Cameron Winklevoss served as the primary catalyst for the correction.
From the technical point of view, 200-DMA effectively stopped Bitcoin rally, providing a strong long-term resistance for the coin, Rob Sluymer, technical strategist at Fundstrat Global Advisors, explains.
“In the very short-term BTC, is likely at a pullback/pause point at resistance level coinciding with a 61.8% retracement of the May-June downtrend just below the May 20 highs and near the declining 200-DMA,” he noted.
The last time Bitcoin reverted from its 200-DMA, it lost over 40% of its value in seven weeks.
Bitcoin's technical picture
BTC/USD touched $7,707 high during Asian hours but failed to move any higher as the short-term upside momentum is capped by 50-SMA (1-hour chart), currently at $7,712. Once this level is taken out, the recovery may be extended towards the next significant hurdle at $7,800 with the ultimate bullish goal at $8,000. On the downside, the local support is seen at $7,575 (broken trendline) and $7,437 (recent low)
BTC/USD, 1-hour chart
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