Bitcoin has rebounded from its critical support area at $ 31,200 and is trading at $ 31,773 at press time. The pressure to sell has increased this week. Experts predict another bearish event, but there is disagreement over the timing and level of volatility.

Bitcoin daily price chart | Source: Tradingview

Whether bullish or bearish can be built around a sideways price movement with a long consolidation phase.

Renowned analyst Byzantine General has noted a change in funding rates on the BitMex exchange and an increase in short positions. This is often seen as a sign of bottoming out when liquidity rises, which gives market makers an opportunity to push prices to that level to encourage further play.

“Nothing can bottom out if the majority of retail investors are long or short. Some signs of a short attack, but there are no spot bids to blow it away, so shorts just add pressure. Not sure what will happen next. Dropped below $ 30,000, anti-arbitrage, they’re pushing Omega (Omega Squeeze). “

As can be seen in the table below, KingFisher recording many liquidity pools around $ 33,000 and $ 34,000 with signs of increased volatility. Hence, it can be assumed that the big players have a greater incentive for Bitcoin to have liquidity near these levels.

Source: The KingFisher

Additional data provided by CryptoQuant shows that over 14,550 BTC has been added to the exchanges. As can be seen below, the historical increase in foreign exchange inflows has shown us slight upward movements and larger declines. A similar scenario could play out.

Source: CryptoQuant

Two possible scenarios for Bitcoin

Trader Daan Crypto believes Bitcoin is stuck at the lower end of the downtrend channel. According to him, Bitcoin looks weak and could test new lows at $ 30,000.

Source: Daan Crypto

In the event of a retracement to $ 30,000, Daan Crypto thinks there are two scenarios for Bitcoin.

• Bitcoin could fall further below the key support area and slide further than it did at the start of the year by around $ 29,000. In this case, Daan Crypto expects Bitcoin to fall below the $ 23,000-26,000 zone. This could be an ideal area to go long.
• If Bitcoin holds support just before the start of the year, Scenario 1 could be invalidated and Bitcoin could reclaim $ 30,000. This could create the conditions for a rally to their previous highs.

On the other hand, the trader under the pseudonym Rekt Capital believes that Bitcoin may be triple bottom. He anticipates that a daily close above $ 31,500 could be a bullish signal with a target of $ 38,900.

The triple bottom scenario for #BTC is still very much alive at the moment$ BTC #Crypto #Bitcoin pic.twitter.com/lW6xVa5WYh

– Rekt Capital (@rektcapital) July 16, 2021

“The triple bottom scenario for Bitcoin still exists at this point in time.”

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