Bitcoin Finds Support Above $31,000; Can It Recover From Its Downtrend?

Bitcoin (BTC) price has been trading above $31,000 support for five days now, bouncing occasionally to retest the $32,000 high.

The price action is insignificant as the market is characterized by small body candles called doji and spinning tops. These are indecision candlesticks that describe the indecision between buyers and sellers about Bitcoin’s direction. Since July 11, BTC/USD has fluctuated between $31,000 and $34,400, with the bears having the upper hand as price action has been concentrated above $31,000 support.

However, if the bears manage to break the $31,000 support, Bitcoin will fall to a low of $28,000. Later, the bearish momentum will extend to a low of $20,000. Conversely, if the BTC price bounces above the current support, the market will rise and break the $35,000 resistance zone. The bullish momentum will extend to the high at $37,000. Meanwhile, BTC/USD has fallen below the 20% area on the daily stochastic. This indicates that bitcoin has fallen into the oversold region of the market. Buyers will show up in the oversold region of the market.

Bitcoin indicator reading

Presently, Bitcoin has fallen below the 25% area of the daily stochastic. This indicates that the cryptocurrency is in the oversold region of the market. We expect buyers to emerge to push prices higher in the oversold region of the market. The 21-day and 50-day lines SMA are sloping horizontally, indicating a sideways trend.

Technical indicators:

Major Resistance Levels – $65,000 and $70,000

Major Support Levels – $40,000 and $35,000

What is the next direction for BTC/USD?

Bitcoin is consolidating above $31,000 support but fluctuating in a narrow range. The current consolidation will lead to a breakdown or breakout if BTC price continues to trade in a tight range. BTC price is below the 21-day and 50-day SMA. This confirms that the bears have the upper hand.

Disclaimer. This analysis and forecast are the personal opinions of the author and are not a recommendation to buy or sell cryptocurrency and should not be viewed as an endorsement by CoinIdol. Readers should do their own research before investing funds.

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