At the time of writing this analysis, BTC is testing again it’s major support level between $29,000 and $30,000. As mentioned in the previous analysis this is a very strong support level which will be tough to break by the bears.

This particular support level coincides not only with Support/Resistance trendlines on a Daily and Weekly charts, but also with the strong 0.618 Fibonacci level, as seen in the chart above.

In addition, there was large institutional entry into the market at that level, so it will be fiercely defended by investors with a lot of capital. They will be inclined to stock up more Bitcoin at those levels, possibly pushing the price higher.

Here is a Weekly chart of BTCUSD showing the main area of strong support. We can see that the $30,000 area had a very bullish momentum in the beginning of the year. We are now back to those accumulation levels.

Even though this may seem like a good set up to short Bitcoin, as many traders expect the price to go much lower, it’s advised to wait until this this Support level is actually broken and confirmed by a closed candle.

Apparently for some chart analysts this has already happened, yet here when we use Exponential Moving Averages (which officially should be used) we can see that the Death Cross has not happened yet. The red line (50 MA) has still not crossed below the black line (200 MA).

Whether it crosses it or not, does not really matter as these are lagging indicators and dynamic price action can change everything substantially.

Let’s take a closer look at the Bitcoin price action here on the daily chart.

On the 15th we can see that it tested the 200 MA once again and it got rejected by the sellers, who will defend this level until they run out of steam. The price went south in the following 4 days which is marked by the bearish candles on the chart.

The price reached near $33,500 and at this level the bulls started to push the market a bit higher forming a bullish Pinbar candle with a long wick. The price will likely go higher until it tests the 200 MA level again. Notice the consecutive 5 bearish days, which has not happened many times for Bitcoin so expect to see a few green bullish candles in the upcoming days.

Personally, I think that the doom scenarios proposed by some traders where they see the price of Bitcoin fall below $30,000 with bears pushing it all the way to $20,000 quite unrealistic.

Of course, everything is possible, but this type of aggressive bearish push would really go against the institutional investors who entered the market near $30,000. They are unlikely to let his happen and are much more likely to buy more Bitcoin near the same level as when they entered.

Having said that, a quick dip below $30,000 is still possible but it is unlikely that the price would remain below that level for a long time and that Bitcoin would enter a bear market.

Given the aftermath of Covid, rising inflation and the increasing supply of the US dollar, Bitcoin is very likely to hold its value for the medium and long term investor.

This is most likely the main reason for the sudden price increase and the bullish momentum.

Some attribute the price increase to new tweets by Elon Musk that Tesla will resume to accept Bitcoin, as soon as mining becomes greener. Although this may be viewed as slightly more positive news than a broken Bitcoin heart emoji he posted recently, it did not have the power to move the market by 10%.

Too many Twitter and Reddit followers think that Elon Musk has the power to move the Bitcoin market. Sure, officially accepting Bitcoin by Tesla is bullish news for Bitcoin but some random personal tweets do not add or subtract anything of major importance.

The image above shows the Daily chart of BTCUSD. The price hovers below the 200 Moving Average. The black line shows the 50 MA which is getting closer to the 200 MA and many traders are anticipating the upcoming Death Cross.

The Death Cross happens when the 50 MA crosses below the 200 MA on a Daily chart. Usually this type of cross indicates the beginning of a bearish market, but of course this is not always true.

If the Bitcoin price crossed above the 200 MA and the 50 MA on the Daily chart, it would completely change the momentum to very bullish. This is also possible, especially if more countries announce that they are looking to adopt Bitcoin as legal tender, as did El Salvador recently.

Let’s have a look at the Weekly chart of BTCUSD with the same Moving Averages of 21, 50, and 200.

The Weekly chart shows a different view. Here we can see that Bitcoin is consolidating right above the 50 Moving Average and it has not crossed it yet. The 200 MA is still far below the actual Bitcoin price leaving it somewhat exposed to the possible lows of $15,000. On the Weekly chart there is currently no suggestion of the 50 MA crossing below the 200 MA.

This Bitcoin price analysis looks at long term outlook, hence the use of Daily and Weekly charts.