Bitcoin prices have started building support over the last few days, trading above a key price level after spending the last week consolidating.
The cryptocurrency’s price rose to nearly $6,800 on Wednesday, July 4, before falling to almost $6,450 the next day and then fluctuating between that price level and $6,550 on the CoinDesk Bitcoin Price Index (BPI).
While trading within that range, Bitcoin has been establishing support at $6,450, according to Jon Pearlstone, publisher of the newsletter Cryptopatterns.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
‘Key Price Level’
This “has proven to be a key price level for BTC since building a mulltiweek consolidation in April that wasn’t retested until June,” he stated.
As a result, “technical analysis would expect that level to be retested multiple times, and that’s what we’re seeing now,” said Pearlstone.
The technical analyst also added that:
“While it’s bullish short term that BTC has held $6450 since moving up from the lows, the struggle for buyers to follow through and take price above the next key technical level of $7250 is a good indicator it’s best to stay cautious in this market.”
Pearlstone described Bitcoin’s rangebound status as a “struggle” to surpass the next key price level, but other analysts provided a more optimistic point of view.
Bitcoin’s Stabilization ‘Really Good’
Bitcoin’s recent stabilization is “a really good thing,” maintained Mati Greenspan, senior market analyst for social trading platform eToro.
“A more stable price increases the use as a store of value and means of exchange,” he emphasized.
Joe DiPasquale, CEO of cryptocurrency fund of hedge funds BitBull Capital, emphasized that Bitcoin’s recent price fluctuations fit in with a broader trend.
“This week’s price movement is in line with the trend our research has highlighted over the last month,” he stated.
“Every time we have a rally that fails to build meaningful momentum, Bitcoin subsequently slides lower than where it started.”