Bitcoin price surges to $21.8K, but analysts warn that the move could be a fakeout

Many crypto investors have reason to believe that the market witnessed positive price movements on July 7th, alongside gains in traditional markets.

Everyday cryptocurrency market performance. Source: Coin360

According to Jamie Cox, Harris Financial Group Managing Partner, the green day for the markets is occurring against a background of rising U.S. jobless claims. This could indicate that “the pressures on wages may have now peaked”, according to Cox. Cox believes that if this trend continues, financial conditions could become tight enough for the Fed to reduce the rate hikes.

Cointelegraph Markets Pro and TradingView data show that Bitcoin (BTC), after trading close to $20,400 during the majority of July 7, jumped nearly 7% in afternoon hours to reach a daily high at $21,860.

BTC/USDT 1-day chart. Source: TradingView

Here’s what analysts predict could happen next as crypto enthusiasts try to navigate the turbulent waters of crypto winter looking for a bottom.

The trend is still negative

Twitter user Roman posted the following chart, noting that many are becoming euphoric or bullish because they have been repeating similar candle patterns over the past 8 months.

BTC/USDT 1-day chart. Source: Twitter

Roman believes that this fakeout is the latest in a string of falseouts designed to fool traders into believing that the bottom is in, when in fact, the trend is still negative.

Roman said:

“Volume falling in a range is consolidation to continue the trend. There are thousands of inflows into exchanges prior to each top.
Bullish would be a recovery above $23,000

A trader also believes that the trend is still decidedly negative. Gilberto, a pseudonymous Twitter user, provided the following chart showing that Bitcoin’s price has recently broken out of a pennant formation.

BTC/USD 4-hour chart. Source: Twitter

Gilberto stated,

“Bullish Above $23K, For Now Daily Trend is Still Downwards.”

Crypto Tony, a market analyst posted this chart showing what Bitcoin’s price could look like if it continues its downward trend. It shows a “worst case scenario” where Bitcoin could hit $12,000.

BTC/USD 1-week chart. Source: Twitter

Crypto Tony said.

“I don’t think we will see the beginning of the next impulse before later next year. A new bull run peak is not expected until 2024-2025. I am currently at $22-24K, and will increase if the price drops to $17-15K.

Related: Bitcoin traders anticipate a “generational bottom”, but BTC derivatives data is not in line with this expectation

Traders monitor the 200-week moving mean

The 200-week moving mean (MA) is one the most widely used indicators for traders to determine good buying opportunities.

BTC/USD 1-week chart. Source: Twitter

Bitcoin is now below its 200-week MA for the fourth time in its history. This has sparked speculation about the future of the currency and the potential appetite to trade once it reaches that level.

Michael van de Poppe, an independent market analyst, tweeted the following response. It outlines what he believes might happen once the 200-week MA has been recovered.

The 200-Week MA is likely to have insane liquidity. If #Bitcoin breaks this level, I expect we’ll likely be seeing a run of $2-5K upwards within a few days to $28-30K. The sentiment will change.
— Michael van de Poppe (@CryptoMichNL) July 7, 2022

The total cryptocurrency market is now worth $957 billion. Bitcoin’s dominance rate at 43.1%.

com. You should do your research before making any investment or trading decision.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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