Bitcoin prices are locked in a narrow range

24 July 2023 169
Bitcoin prices are locked in a narrow range

The Bitcoin price is holding above the support level of $29,000. After hitting a yearly high of 31,800 earlier this month, the main cryptocurrency has formed a narrow rectangular channel.


One of the limiting factors for the digital currency's momentum is the shrinking stablecoin market.


Traders use stablecoins to transfer money into cryptocurrency markets, to move them between stock exchanges, and to save in periods of high volatility. In general, token capitalization increases during a rally and decreases during a downturn. This year, the total value of the crypto market rose by around 50% to roughly $1.2 trillion, while the stablecoin sector shrank by about 8% to a 2-year low of $127 billion, according to CCData.


According to research analyst at CCData Jacob Joseph, this discrepancy might have several explanations. Expecting higher returns, investors might choose market leaders, such as Bitcoin and Etherium, over stablecoins. The latter do not generate interest income and typically tend to maintain a single-digit correlation with other assets like the dollar.


Bitcoin pricing could also be affected by macroeconomic factors.


Another interest rate hike by the U.S. Federal Reserve (Fed) is projected this week. The regulator is aimed at curbing inflation, but monetary policy tightening might lead the country’s economy into a recession. In turn, this could positively affect the Bitcoin price.


The BTCUSD pair is locked between $29,500 and $31,500.


The Relative Strength Index (standard values) shows divergence on the H4 timeframe. This gives a preliminary signal for a trend reversal within the correction channel.


Support at the 29,500 level has repeatedly confirmed its significance. A rebound from it and indicator values point to the price movement towards resistance of the rectangular channel.


Signal:

The short-term outlook for BTCUSD suggests buying.

The target is at the level of 31,500.

Part of the profit should be taken near 30,725.

The Stop-loss is set at 28,800.


Bullish trend has a short-term character, so the trade volume should not be more than 2% of your balance.


This content is for informational purposes only and is not intended to be investing advice.

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