Bitcoin Outlook for August

Relevance up to 08:00 2022-08-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Bitcoin successfully settled above $23k a week after the Fed meeting. The cryptocurrency maintains its upward trend and has updated its local high at $24.7k. Subsequently, the price declined due to sagging trading volumes. In other words, the cryptocurrency retains all its inherent disadvantages, but despite this, it continues to update local highs. The main negative stage has been passed, which means that the main problem with low purchase volumes will gradually disappear.

In technical terms, the cryptocurrency has shown some success. The asset formed a local support zone above $23k, creating a springboard for further movement to $24.5k–$25k. Thus, Bitcoin moved to a new range of fluctuations, limited to $23k–$24.6k. The cryptocurrency continued its upward movement towards the resistance level at $24.6k, tried to trade above this mark, but failed and began to decline. After testing the upper limit of the channel, the asset declined to the support zone by $23k.

The main task of the bulls at this stage is to maintain this level and the structure of the local upward trend from June 18. Despite the sagging trading volumes, we see a bullish sentiment in the Bitcoin market. It is evidenced by uncertain bearish doji candles, indicating the weakness of sellers. Over the past three days, not a single confident red candle has been formed. At the same time, the bears also failed to absorb the volumes of the green candle of July 28. To a large extent, this is due to the general decrease in trading activity over the weekend.

Cryptocurrency technical indicators remain neutral. The RSI index is moving flat above 40, which indicates the preservation of the buying potential and increased attention to the asset from investors. The Stochastic Oscillator formed a bearish cross after a strong green candle on July 28. It indicated the exhaustion of the upward potential of the asset. However, according to the August 1 results, the metric completes the bearish crossover, indicating a decrease in the activity of sellers. MACD continues its upward movement above the zero mark, suggesting the continued upward potential of the cryptocurrency.

It is also important to note that investors managed to break through important levels of accumulation, thanks to which the structure of the upward trend has strengthened. The asset gained a foothold above the $21.7k–$22.3k area, where over 69k different addresses purchased over 50,000 BTC. Thanks to this, the asset has an upward potential to move to $23 and above. The next cumulative target for investors will be $23.3k, where more than 270,000 BTC were purchased. The main battle for this frontier will unfold with the opening of US markets. And if, by the end of Monday, the price manages to close above $23.3k, then Bitcoin can start an upward movement towards $25k–$27k.

As for medium-term targets, the cryptocurrency is able to reach the $28k–$30k area by the end of August. The market has cheered up, the main negative stages and the Fed meetings have been passed. There is also an increase in the number of super-large wallets by 7% to 103. It also confirms the active accumulation on the part of all categories of investors. At the same time, the Fed’s policy now depends entirely on the CPI’s real dynamics, not on forecasts. It can have both positive and negative effects. At the same time, the correlation of Bitcoin with stock indices remains. Therefore, in an unfavorable situation, the asset will follow SPX.

In general, the situation around Bitcoin and the cryptocurrency market is becoming more positive. However, the recovery process has just begun, and we expect falls and long-term consolidation. Bitcoin continues to be dependent on fundamental factors and the movement of stock indices, and therefore, when analyzing BTC, it is necessary to consider fundamental factors.

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