Bitcoin $30K Region Gaining Significance Amongst the Bulls and Bears

Looking at the current state of being on Bitcoin in Week 29 of 2023

Fundamentals: A blessing and a plague

After a rapid increase of its US$ 32,000 resistance region Bitcoin has seen multiple downfalls since then as the fundamental aspect of Bitcoin remains mixed. On one hand, we are seeing an increase in demand on the derivative contracts, and a continued premium on the BTC futures contracts, known as contango, suggesting a decent bullish conviction for another increase in price.

At the same time, the macroeconomic environment has not been giving space for on-risk assets such as Bitcoin to continue to thrive, as Asia is falling short of market expectations missing its gross domestic product growth expectations. Additionally, the ongoing trade war between the U.S. and China and the U.S. debt issues create a favorable scenario for bears, supporting the thesis of US$ 30,000 as resistance to strengthen.

Technical Analysis

Overall, Bitcoin remains within a confined range, marking US$ 32,000 as its main resistance, and its US$ 29,500 region as support with a well-defined equilibrium in the middle of its trading range sat at US$ 30,500, represented in Figure 1. below as red, green, and orange. Ultimately breaking above either the green or red box would show a clear progression and continuation of the next section of the chart as Bitcoins narrative unfolds.

figure1

The orange line functions as an equilibrium, that acts as a sublevel resistance in case price spends time below the region, whereas a slightly more bullish case can be made if price spends time above it. From the image below, it becomes clear that price recently has spent a significant amount of time below its equilibrium, and as of the time of writing, therefore, favours a slightly bearish case, indicating the red box to be challenged shortly again. If bitcoin reclaims the equilibrium the fundamentals will shift in favor of the bulls, after which another increase in price becomes more likely.

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