Disclaimer: The results of the following analysis are the sole opinion of the writer and should not be considered investment advice.
In early July, Bitcoin [BTC] traded at a low of $ 18.8k. Over the past two weeks, and especially the past week, Bitcoin has been making steady gains.
Bitcoin met some resistance at $ 24,200, with further resistance in the $ 26,700-$ 27,100 area. The USDT dominance chart has reached a support area and looked set to rebound.
Such a rebound would be indicative of selling pressure in the market and market participants increasing their holdings in USDT. News of Tesla selling 75% of its BTC holdings has also affected the market in a bearish fashion in the past few hours.
BTC- 1 day chart
The long-term price chart has shown a strong downward trend for Bitcoin since December 2021. Bitcoin had formed a year-long range from $ 29.5k to $ 65k. In June, the price plunged below range lows.
Although last week saw a strong rally in Bitcoin that broke the highs below $ 23,000 and $ 22,000, the trend was not yet firmly bullish. Much more unstable could be around the corner, which means risky trading conditions.
However, it should be noted that the breakout of the lower highs has meant that Bitcoin has a bullish structure and could rise to the upside, as long as it defends the $ 22k area. Hence, this area would be one to watch out for.
The Relative Strength Index (RSI) pushed above the neutral line of 50 and even beyond 60, before a retreat. This showed that the momentum could have shifted in favor of the bulls over the daily time frame.
This is also related to the breakdown of the market structure. If the RSI has managed to stay above neutral 50 e BTC Power stick up for the $ 22k- $ 22.3k area, it was possible that the price would rise higher.
The on-balance volume (OBV) has been steadily declining since April. The rally over the past two weeks has only brought OBV to a resistance level. This was not encouraging, as the OBV had to cross the threshold to indicate stable demand and an extra increase.
The Directional Motion Index (DMI) showed a strong uptrend underway, a reaction to the rally over the past two weeks. The ADX (yellow) and + DI (green) were above the 20 mark.
The indicators are lagging behind the price but have shown bullish momentum.
The volume of purchases was not yet overwhelming and breaking the OBV resistance would have been a welcome sight for buyers. The $ 22k- $ 22.3k it was essential supportand if defended, another higher leg could materialize.