20% fall from peak followed by 7% retracement. What charts tell about Bitcoin’s future trajectory

Lately under pressure, world's most expensive crypto asset Bitcoin (BTC) fell 20% to a low of $58,602 on outflows in BTC ETFs. Though it has clawed its way back by 7% over a week's time, its future trajectory will depend on a slew of factors including expectations of Fed interest rate cuts and institutional interest in this asset. Analysts look at the charts and tell its July outlook and what strategy traders should adopt.

BTC is trading in a range between $62,000 and $63,800 and is still down by around 14% from its all-time peak of $73,750.07. However, its start for this week was with significant volatility where it hit levels of $65,500.


Source: Coinmarketcap.com

While multiple analysts see bullish sentiments remaining intact, they are not ruling out significant moves on either side, cautioning the traders of volatility.

"Based on recent price action, Bitcoin (BTC) appears to be oscillating around the $63,000 support level after a volatile start to the week that saw it rise to $65,545. Despite short-term swings, sentiment remains bullish with expectations that bitcoin's price stability around $60,000 could pave the way for potential upside moves, especially if broader economic conditions and monetary policy signals align favorably," Sathvik Vishwanath, Co-Founder & CEO, Unocoin said.

With a strong support around $60,000, Bitcoin is expected to fluctuate between $60,000 and $65,000 in the short to medium term and may even drive towards the $70,000 barrier level, Shivam Thakral, CEO at BuyUcoin tells ETMarkets as he warned traders to remain wary of any potential pullbacks.

Expert Minal Thukral, Head, Growth & Strategy at CoinDCX, remains less sure about the near term prospects of Bitcoin notwithstanding BTC's strength on the weekly charts where it has rebounded notably after testing the 20 EMA and $60,000 support levels. Thukral maintained presence of a solid uptrend in BTC on a broader time frame even though the outlook for him in the near to medium term movement remains uncertain.

Historically, July has been a month of strong performances for BTC with an average yearly return of 7.23%.

The CoinDCX’s analyst expects Bitcoin to target a range high of approximately $72,000 to $73,000.

Bitcoin's returns over the past five years are multibagger and to the tune of 480%.

Cues on charts
All three experts advised traders to watch out for divergences in RSI and MACD on shorter time frames, to gauge potential shifts in momentum and market sentiment.

While moving averages help identify trends, RSI indicates overbought or oversold conditions, the Fibonacci retracements indicate potential support and resistance levels.

Bitcoin's institutional acceptance, especially after the launch of Bitcoin ETFs has augured well for this crypto asset. This has had a positive impact on altcoins. Recently, asset manager VanEck's filed for the first Solana (SOL) ETF in the US. This follows closely on the heels of a similar Solana ETF launch in Canada just six days prior.

"The long-term value proposition of Bitcoin is also significantly influenced by its expanding use case in decentralized finance (DeFi) and its ability to act as a buffer against economic risks," BuyUcoin Thakral said.

Additionally, advancements in blockchain technology and growing interest from retail investors add to its long-term appeal, Vishwanath added.

Bitcoin's appeal as a hedge against inflation and currency devaluation could also keep Bitcoin on the boil, opined CoinDCX's Thukral.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)