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Bitcoin Back In Bullish Posture

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Andrew Kamsky
Last Updated

Key Takeaways

  • Staying above $60,400 support confirms the second bear trap, indicating potential bullish momentum for Bitcoin.
  • Breaking above the $72,000 resistance confirms an upward trend and a failure may lead to price consolidation in the channel range.
  • The monthly RSI hovered near 65. Historically, breaking past this level has led to massive bullish runs.

On July 14, Bitcoin saw increasing buying activity as the crypto market calmed down. At press time, the reigning crypto king finds itself in a rectangular channel, moving between key support and resistance levels. Should Bitcoin stay within this channel, the bears could be in for a trap for the second time this year. 

Will the bears be caught off guard by the bulls, or will Bitcoin retrace its newfound gains?

Bear Traps and Market Reaction

BTC/USD Chart
BTC/USD Chart

First Bear Trap (January 2024)

Bitcoin printed its first bear trap in January 2024, when BTC dipped below the $42,000 support level. The bears were expecting lower prices but were caught off guard when the price reversed upwards, leading to a sharp upward movement back into the established channel and later breaking out. This incident underscored the strength of the support level and the market’s bullish sentiment at that time.

Second Bear Trap (July 2024)

Now, in July, Bitcoin is potentially printing out its second bear trap, as it momentarily dipped below the $60,400 support level. Like the price action in January 2024, Bitcoin once again slipped below the $60,400 support only to quickly recover, signaling stronger buying interest and a rejection of lower prices. This rebound has pushed the price back into the channel between the $60,400 support and the $72,000 resistance. 

Bitcoin must hold above $60,400 to confirm the second bear trap. Should its price struggle to maintain this level, BTC could print another lower low. 

Key Levels to Watch: Support and Resistance

The price action in BTC/USD has clearly defined its support and resistance levels:

  • Support Level ($60,400): This level has proven to be a strong floor for the price, with multiple successful tests indicating buying interest. The recent bear traps further validate the strength of this support.
  • Resistance Level ($72,000): The price has faced significant selling pressure around this level, with several attempts to break above it failing.

Long-Term Perspective: BTC RSI Analysis

The monthly BTC RSI chart offers additional insights:

BTC/USD RSI Monthly Time frame
BTC/USD RSI Monthly Time frame
  • Support Level ($60,400): This level has proven to be a strong floor for the price, with multiple successful tests indicating buying interest. The recent bear traps further validate the strength of this support.
  • Resistance Level ($72,000): The price has faced significant selling pressure around this level, with several attempts to break above it failing.

Long-Term Perspective: BTC RSI Analysis

The monthly BTC RSI chart offers additional insights:

RSI Trendline Resistance

Bitcoin’s RSI hovered around the 65 mark at the time of writing, below its long-term descending resistance. Historically, breaking past this level has led to significant bullish runs. Although the RSI at this level indicates Bitcoin is overbought, there is an opportunity for more upside price momentum.

In previous instances, Bitcoin saw RSI breakouts above the moving average on the monthly time frame in June 2016, October 2016, June 2019, October 2021, January 2024, and now July 2024.

Outlook

Given the technical setup:

  • Short Term (1-3 months): Bullish. The price’s re-entry into the channel and strong support at $60,400 suggest a potential upward movement toward the $72,000 resistance. However, Bitcoin must hold $60,400.
  • Medium Term (3-6 months): Testing the $72,000 resistance would confirm a continuation of the upward trend. Failure to do so might result in prolonged consolidation within the $60,400 – $72,000 range.
  • Long Term (6+ months): Breaking out of the channel remains a hurdle. A breakout above this resistance line of $72,000 would confirm a long-term bullish trend, while failure could indicate further consolidation or bearish movement.

Conclusion

The BTC/USD price chart shows a structure characterized by support at $60,400 and strong resistance at $72,000. The recent bear traps and subsequent recoveries illustrate strong market confidence. While the short-term outlook appears bullish, the medium to long-term prospects depend heavily on breaking key resistance levels and overcoming RSI trendline barriers.

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Andrew Kamsky

Andrew Kamsky is a writer and chart analyst, holding a degree in Economics and an ACCA certification. Andrew’s professional background spans roles at a Big Four accountancy firm, a fintech bank, and a chart analyst position at a listed bank focusing on foreign currency hedging. Beyond his financial career, Andrew is passionate about music, glass neon lights and travel.
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