The 200-week moving average is just one of several lines in the sand that bitcoiners should keep an eye on this week.
Bitcoin (BTC) is putting pressure on new found support levels this week as geopolitical uncertainty raises rates for risky assets.
Data from Cointelegraph Markets Pro and TradingView shows that after an impressive month close, the momentum of Bitcoin’s recent uptrend is waning and stock markets are not helping the bulls.
Volatility was low in early August, but fears of a potential standoff between the United States and China over House Speaker Nancy Pelosi’s visit to Taiwan are already showing in Asian trade on August 2.
Amid talk of the “bear market rally” that the current setup might describe, Cointelegraph looks at the key support and resistance levels that the market is currently facing on short timeframes.
Traders unsure about the fate of the 200-week moving average
The interests of buyers and sellers are immediately apparent when analyzing the order book data on Binance, the world’s largest exchange by volume.
BTC/USD is currently engulfing a range of orders just below $23,000. However, if all this liquidity is used up, there is little else to support the price action until it approaches $21,000.
The strength of the buy and sell walls on the Binance order book can be deceiving as large players can quickly move orders or requests from one level to another.
The latest data was uploaded to social networks on August 1 by the web-based analytical resource Material Indicators. They also highlighted the importance of Bitcoin’s 200-week moving average (MA) at just above $22,800.
Weekly candlestick chart of BTC/USD (Bitstamp) with 200MA. Source: Trading View
Some whales, according to Material Indicators, tried to hold the 200-week moving average as support, but did not see much consensus from other groups of traders, which led to a subsequent break below the trend line.
“It doesn’t look like they get a lot of help from the other classes. I’m not sure how long they can continue like this,” read some of the accompanying comments.
BTC/USD buy and sell levels (Binance). Source: Significant indicators.
$26,000, then “new lows”?
While the situation in Taiwan rocked the markets that day, a short-term move higher in bitcoin is not out of the question even for some of his most conservative analysts.
Related: Best Monthly Gain Since October 2021 – 5 Things To Know About Bitcoin This Week
For popular crypto Twitter account Il Capo, BTC/USD could even reach $25,000 before falling back below current levels.
In response, fellow trader Gibon suggested that the price could hit $26,000 before a bearish reversal occurs.
— Trader_J (@Trader_Jibon) August 2, 2022
While remaining silent on the potential downside target, Venturefounder, a member of the online analytics platform CryptoQuant, called $22,000 a “good price” to go long BTC.
Altcoins, including ether (ETH), looked less appetizing.
“Do I still think most altcoins are too expensive for this part of the cycle, or should I say that bitcoins are too cheap?” he asked on August 1st.
“To me, $22,000 is still a good value for a BTC long position. I can’t say the same for altcoins, not even $ETH.”
At the time of writing, ETH/USD is trading below $1,600, down about 4% on the day, but still up 12% from the same time a week ago.
“If you don’t think ALT will soon break through to its ATH against BTC, it doesn’t make sense for too long,” Venturefounder added.
Meanwhile, a look at the ETH/BTC chart highlights the importance of the 0.075 resistance for ETH bulls, which failed to break during the July cryptocurrency rally.
ETH/BTC 1-Day Candlestick Chart (Binance). Source: Trading View
The views and opinions expressed here are solely those of the author and do not necessarily reflect those of Cointelegraph.com. Every investment and trading move involves risk, so you should do your own research when making a decision.