Bitcoin (BTC) is struggling to avoid further losses this week as an extended sideways trading period risks ending in a breakdown.
BTC price action, long constricted by resistance above $30,000, is looking increasingly unstable, data from cryptodirectories Markets Pro and TradingView shows.
The latest Federal Reserve minutes served to sharpen Bitcoin bears’ game on their release on Aug. 16, with buyside interest declining to send BTC/USD to near two-month lows of $28,300.
Given the narrow trading range in place since June, the drop was significant, even if totaling less than $1,000 in U.S. dollar terms.
Now, traders and analysts are preparing for further support retests, including levels not seen since earlier in the year.BTC/USD 1-day chart. Source: TradingView
Classic Bitcoin bear market lifeline back on the map
The top to near $28,000 has placed major long-term trend lines back in focus for Bitcoin market observers.
Among these is James Straten, research and data analyst at crypto insights firm CryptoSlate. For him, both the 200-day and 200-week simple moving averages (SMAs) are the lines in the sand for bulls.August 17, 2023
The 200-week SMA is a classic support line during periods of downward BTC price pressure, and losing it is a phenomenon characterizing the pit of Bitcoin bear markets.
2022, however, saw Bitcoin’s longest-ever spell below the 200-week SMA.
This month, analysis predicted that holding the key trend line would be one factor allowing BTC price performance to flip “full bull” next month.BTC/USD 1-week chart with 200 SMA. Source: TradingView
Trend line cluster lurks above $27,000
The significance of the current Bitcoin spot price range becomes apparent when taken from the perspective of support trend lines.
Various trend lines, including simple (SMAs) and exponential (EMAs) moving averages, now form a cluster between $27,000 and $28,600.August 17, 2023
As cryptodirectories reported earlier in the day, the short-term 100-day SMA is currently being tested as support as part of the Aug. 17 daily candle.
$28,000 still “heavy” BTC price support
As a psychological foundation, meanwhile, $28,000 remains firmly intact in the eyes of the market.
Related: Bitcoin speculators now own the least BTC since $69K all-time highs
For popular trader CryptoCon, there remains little need to worry over a significant crash any lower, and other “bullish supports” should hold out against bears, as well.
“Bitcoin drops a whopping 700 dollars and bears are euphoric. Meanwhile, healthy bullish supports are completely intact,” part of an X post on the day stated.“$28,000 remains heavy support on all time frames. Will these bullish supports hold? I think so!”BTC/USD annotated chart. Source: CryptoCon/Twitter
CryptoCon built on an existing comparison to BTC price in 2015-2016, when the market was preparing the ground for a bull run to its last cycle’s $20,000 peak.
I wasn’t there, but I’m sure every sideways grind and drop to the 111DMA on the Pi-Cycle Top during 2015-16 felt like the end.
But guess what happened?#Bitcoin just kept on going
Are we Parabolic?…. nope ❌
Bull Market?…. yes!✔️
Looks like a healthy retest to me! pic.twitter.com/UdXAhLv8RO— CryptoCon (@CryptoCon_) August 16, 2023
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.