Is Bitcoin Price Drop to $29000 a Setback or an Opportunity for Next Rally?

On July 24th Bitcoin price ended a month-long sideways trend in the seller’s favor with a breakdown below $29650 support. The bearish candle backed by a significant surge in trading volume reflects a higher conviction of further downfall. However, the BTC price failed to offer a significant follow-up and is still wavering in a retest phase. Was the recent breakdown genuine or a bear trap?

Also Read: Will Bitcoin Shed More blood? Big Whales Trnx Caught

Bitcoin Price Daily Chart

• A breakdown below the $29650 support sets the BTC price for a 5% drop
• The 200-day EMA along with the support trendline carries the current bull trap
• The intraday trading volume in Bitcoin is $11.6  Billion, indicating a 10.6% loss.

Source- Tradingview

Over the past four days, the Bitcoin price has been wavering below the recently breached support of $29650. The daily candles with long high price rejections indicate sellers are defending their newly reclaimed resistance.

By press time, the largest cryptocurrency-Bitcoin traded at $29452 with an intraday gain of 0.43%. If the overhead supply pressure persists, the coin sellers would drive a sharp drop of 5% to reach the $28000 psychological support.

However, the $28000 support aligned with long-coming support lines creates a high accumulation zone for buyers. If the coin price shows sustainability above the aforementioned support, interested traders can purchase BTC to grab the next recovery cycle.

Can BTC Price Rise Back to $32000?

A high momentum support breakdown is likely to sharp downfall and reach the desired target without much. However, if the coin price continues to wobble below the breached support it would indicate weakness in bearish momentum. In such a scenario, the coin price may re-enter the breached level creating a bear trap scenario. This fake breakdown would result in accelerated bullish momentum and may surge the Bitcoin price to $32000.

• Exponential moving average: With the recent drop, the sellers also reclaimed 20-and-50-day EMAs offering an additional edge on short positions
• Average Direction Index: The falling ADX slope indicates the prior bullish momentum is weakening.