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Bitcoin is approaching the monthly candlestick close with strength as it holds above a significant area of support.
Bitcoin to Close July in the Green
Bitcoin is about to close July in the green while one technical indicator looks ready to flash a buy signal.
The leading cryptocurrency surged by nearly 18% in July after enduring a brutal 56% correction in the second quarter. The upward price action seen over the past month coincides with improving market sentiment. Although the U.S. economy has entered a so-called “technical recession” after two consecutive quarters of negative growth, investors are indicating that they believe that the weak macroeconomic conditions have been priced in.
From a technical perspective, Bitcoin is holding around the 50-month moving average. Meanwhile, the Tom DeMark (TD) Sequential indicator looks like it’s about to present a buy signal in the form of a red nine candlestick on the monthly chart. The bullish formation anticipates a one to four monthly candlesticks upswing or the beginning of a new uptrend.
Transaction history shows the importance of the 50-month moving average. Roughly 3.67 million addresses have purchased 2.47 million BTC at an average price of $20,650. If this significant demand wall continues to hold, Bitcoin has a chance of validating the optimistic outlook.
Further buying pressure around the 50-month moving average could push Bitcoin toward $31,340 as IntoTheBlock’s Global In/Out of the Money model shows little to no resistance ahead.
It is worth noting that a loss of the $20,650 support level could lead to a major downturn. Dipping below this interest area could cause panic among investors, leading to potential sell-offs as market participants look to avoid further losses. The potential sell-off could push Bitcoin to the next crucial area of support, which sits at around $11,600.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.