Will Bitcoin maintain its uptrend above $56.5K as volatility worsens?

Bitcoin’s value briefly dropped below $60,000 before stabilizing above it, witnessing a drop of over 4.50 percent. Bitcoin (BTC) has been experiencing fluctuating prices, and the current market sentiment indicates that a monthly close above $56,500 is essential to sustain its uptrend.

This level, highlighted by trading resource Material Indicators, is pivotal for BTC bulls. If Bitcoin falls below this threshold, it risks losing its positive momentum, which has built up over recent months. Edul Patel, CEO of Mudrex, said:

Bitcoin’s price fell to $59,000, the lowest point in six weeks. There are several reasons for this decline. The German government, which transferred nearly 6,500 BTC, as reported by Arkham Intelligence on June 19, pulled BTC down. Recently, Mt. Gox announced it would return $8.5 billion worth of BTC to clients affected by the 2014 hack. Since Bitcoin’s price has risen more than 8,000% since 2014, this could introduce a certain amount of selling pressure for BT

Edul Patel

Patel added that the decline in BTC’s price also coincides with outflows from spot Bitcoin ETFs. However, BTC has since recovered and is trading above the $61,000 level. The next immediate resistance lies at the $61,400 level, and the support is at the $60,800 level. Investors and traders should monitor the market closely for developments.

Bitcoin market pressure and volatility

Bitcoin had reached a peak of $70,000 at the beginning of June but has been steadily declining since then. The drop began on June 22, with the price hitting a low of $58,580. Bitcoin has since regained some value, currently settling around $61,279.

This week, BTC/USD fell to its lowest level since the beginning of May, and traders are now firmly focused on those old lows.

Material Indicators indicate that market pressure will build through the end of the week, owing to the weekly, monthly, and quarterly closes falling on the same day.

“So far, Bitcoin seems to be recovering nicely from this week’s mini flush,” co-founder Keith Alan commented alongside a chart from one of Material Indicators’ proprietary trading tools.

He added, “There is always a chance that price goes back to retest the lows before Sunday, but as long as the monthly candle closes within or above the red box, then the trend remains intact.”

Alan also tracked order book liquidity and alerted us to potential “spoofing” in the coming days. Spoofing refers to the artificial shifting of liquidity between various levels by large-volume traders in an attempt to influence price action.

Implications for investors

For Bitcoin investors, the key takeaway is the importance of the $56,500 support level. A close above this level would signal continued strength and potential for further gains. Conversely, a drop below could indicate a shift in market dynamics, potentially leading to more bearish conditions.

Also Read: Is Bitcoin Cash Relevant After All these Years?

Investors should also be prepared for increased volatility due to the convergence of significant market events. Additionally, monitoring order book liquidity and RSI levels can provide insights into potential support and resistance areas, helping to inform trading strategies.

Bitcoin’s performance at the end of June will be crucial in determining its short-term trend. Investors must stay informed and vigilant to navigate this critical period.

Cryptopolitan Reporting by Florence Muchai