Bitcoin (BTC) has managed to jump back above $30,000 after falling sharply in the last few weeks. There is hope the mega-cap coin is finally back on an upward trajectory. However, technical analysis does not support this and in fact, the surge could be a dead cat bounce. Here are some highlights:
- Bitcoin struggles to sustain momentum above $30,000
- The coin will need to advance above $30,800 before any decisive run
- It is likely that BTC will fail to recover the $30,800 and will fall sharply thereafter
Why Bitcoin will fall below $30,000
The $30,000 price is psychologically important for Bitcoin. In fact, when the coin fell below it, there were fears that it could unravel to $20,000. But Bitcoin has recovered and has finally regained $30,000.
Although this could be the start of an extended recovery, BTC still has a long way to go. Based on technical analysis, the coin will need to recover the $30,800 support. So far, he’s been struggling to hit the bull’s eye. We do not believe that BTC has enough bullish momentum to reach this price.
Also, the rally this week could be driven by short-term dip buyers. It is likely that they may start cashing in once they realize the upside above $30,000 is limited. Eventually, BTC will likely drop in the short term and could retrace losses towards $26,000 before another leg up.
Do Whales Hoard Bitcoin?
Interestingly, most large wallets are invested in Bitcoin for the long term. In fact, larger wallets added more Bitcoin during the May decline.
For this reason, BTC is likely to remain relatively stable in the short term. The coin could still find its ATH this year but we will have to wait and see if sentiment improves.