Investing.com – The price of Bitcoin has experienced significant volatility since late June, with sellers consistently offloading their holdings near the $31,000 mark, while buyers have been stepping in around $30,000. The cryptocurrency has been trapped within a narrow range of $30,000 to $31,000, attempting occasional breakouts that are ultimately followed by a retreat to the $29,700 range. However, Bitcoin saw a slight recovery over the weekend, managing to hold on to the crucial $30,000 level.
Currently, Bitcoin’s trading volume indicates a significant development. The cryptocurrency began the week situated between two important exponential moving averages (EMAs). The 21-day moving average, standing at $29,800, represents a critical support level that coincides with the lower boundary of the resistance area. Should Bitcoin break below this level, it could signal a downside breakout for its price.
Traders and investors should keep a close eye on the important level of the long-term rising trendline at $28,900, which also aligns with the 0.382 Fibonacci retracement level. A drop to this level could be viewed as a healthy correction before the upward trend resumes. Another intermediate support to monitor is around $28,000, with particular attention to a daily close below $28,900. If further declines occur, the $26,000 to $27,000 support area will regain prominence.
In terms of resistance, the nearest level to watch is the 8-day exponential moving average (EMA) at $30,300. Bitcoin has encountered difficulties breaking above this level over the past week, and trading volumes have remained low. For the uptrend to consolidate, Bitcoin’s hourly close would need to surpass this level and sustain itself at $30,500. If this milestone is achieved, the cryptocurrency’s price could target the recent peak at $31,500 and potentially move towards the $32,000 to $34,000 range.
Last Friday, the release of lower-than-expected U.S. non-agricultural employment data contributed to increased buying of Bitcoin at lower prices throughout the week. However, the market’s focus has now shifted to the upcoming release of U.S. inflation data on Wednesday. Analysts anticipate a decline in core U.S. inflation to 5% on an annualized basis. If the inflation trend aligns with expectations, it could strengthen people’s appetite for cryptocurrencies.
It is worth noting that Bitcoin experienced a brief 25% rally last month, surging from $25,000 to $31,000 after data revealed an expected retreat in U.S. inflation. Additionally, the positive movement surrounding BlackRock’s spot Bitcoin ETF has provided a boost to the cryptocurrency’s price.
If June’s U.S. inflation data falls in line with expectations, it may further fuel individuals’ risk appetite for cryptocurrencies. In such a scenario, Bitcoin could follow a similar trajectory as it did after last month’s data release, pushing its price towards the $32,000 to $34,000 range after testing the 0.382 Fibonacci retracement level below $29,000 and gaining momentum.
Ethereum Faces Resistance at Key Level, Poised for Potential Breakout
Shifting focus to Ethereum, the second-largest cryptocurrency faced significant resistance near the $1,950 mark last week, which coincided with the 0.618 Fibonacci retracement level of the previous decline. The $1,950 level has played a crucial role as both support and resistance since May.
During the previous week, Ethereum witnessed a decline, with the short-term support area touching $1,825, while selling pressure emerged around $1,950. The range between $1,825 and $1,950 has proven to be a crucial zone of support and resistance.
If Ethereum manages to hold the support level at $1,825 this week, increased demand in the latter half of the week could propel the cryptocurrency back into the $1,900 range and potentially break the resistance around $1,950. Such a breakout would likely attract additional buying interest, driving Ethereum towards the $2,000 range.
However, failure to maintain support at $1,825 would shift the focus to another closely monitored support level at $1,750, particularly if the daily close falls below this threshold.
As the week progresses, market participants will closely monitor Bitcoin and Ethereum’s price movements, keeping an eye on key support and resistance levels to gauge the direction of the overall cryptocurrency market.