Bitcoin Analysis July 20 - Big 30K Support Level

Bitcoin has gone below the $30,000 price support level for the 6th time in the past two 2 months.   Since peaking at levels over $60K in early May, Bitcoin has been under severe selling pressure.   The key news driving the price lower has been the Chinese crackdown on Bitcoin miners.  This crackdown has led to a significant decrease in the Bitcoin Hash rate (Bitcoin computational power) as these miners were removed from the Bitcoin network.

Bitcoin Hash rate has stopped declining – Bullish

The Bitcoin Hash rate hit a yearly high on April 13 of 198.5 TH/s.   As the Chinese crackdown was occurring it hit a low of 58.5 TH/s on June 26^th.   Since then, the Bitcoin hash rate has slowly recovered, currently at a level of 115.5 TH/s on July 18^th.  

The data shows the mining processing power decline has stopped and is now reversing back to higher levels.   It seems the blockchain network will continue to see this steady increase as mining operators return online to locations outside of China.   Significant is the movement of these miners to countries that are crypto friendly while reducing the influence China has on Bitcoin.   This is long term bullish.

Bitcoin Short levels are declining - Bullish

From June 7^th, 2021 to June 15^th 2021 the price of Bitcoin and the levels of short contracts on Bitfinex were both going up.   From June 15^th Bitcoin went down in price from $41,200 to $28,728 on June 22^nd.    After June 22^nd the Bitcoin price will recover to a level of $35,400 on June 24^th.  

This metric was not as clear cut from June 25^th to 27^th when the level of shorts has a major pump and dump, as the price of Bitcoin had already started to decline after hitting a peak on June 24^th as mentioned above.  On June 29^th the Bitcoin price increases to a high of $36,660 before turning negative for the end of June and July.

This brings us to the 3^rd short interest increase that started on July 8, peaked on July 15 and returned close to the normal level that has been present for most of 2021.  The June 22^nd and 27^th short position decreases both led to short term Bitcoin price increases.   Time will tell how the July 15 short position reduction will impact the Bitcoin price.

Bitcoin volume pumps at 30K support levels – Bullish for most of 2021, Neutral now

When a support level fails, it is typical to see a significant continued drop to the next support level.   However, this  has not occurred so far in 2021 as the 30K price support level has held firmly.   This year, when Bitcoin has fallen below the 30K level a corresponding volume increase have fueled upward Bitcoin price movements.  The price chart shows this clearly:

However, with the current dip below 30K, the volume level has not yet significantly increased compared to prior periods in 2021.   While the current volume levels are the highest that have occurred in July, the volume level is low compared to other dips below 30k in 2021.

Current Bitcoin Momentum – Bearish

With Bitcoin currently near its lowest price ($29,760 at this time of writing) since January, the current technical indicators for its predicted price movement is bearish.  I mentioned a month ago, Bitcoin first must prove it will stop going down before it can enter the next bull cycle.    When Bitcoin shows it can maintain the price level of 30K to 32K for multiple days to a week, the technical momentum and analytics will start to turn bullish.   Realtime Cryptocurrency Analytics

In summary, I am presenting 2 Bullish, 1 Neutral and 1 Bearish indicator for Bitcoin price movement.   It’s ideal to wait for a volume increase; for the Quantify Crypto Trend algorithm to turn bullish; while the Bitcoin hash rate continues to increase.   Wait for all these metrics to turn bullish.  

The platform Quantify Crypto provides live cryptocurrency prices, technical analysis, news, heatmaps and more. Our flagship product is the trend algorithm, designed to be on the correct side of significant cryptocurrency price moves.

None of this is meant to be financial advice and I do not have any financial expertise. Although I worked at the New York Stock Exchange for over 23 years, it was as a developer supporting computer systems, not as a stock trader.

Full discloser: I do own Bitcoin and have other altcoin positions.