Bitcoin has seen plenty of sideways price action this week, but may be able to extend its gains and regain higher grounds. The cryptocurrency continues to trade in the green and appears to be showing signs of further appreciation in the near term.
As of this writing, Bitcoin is trading at $23,200 with 9% profit over the past week and 1% profit over the past 24 hours.
Over the past week, Bitcoin has provided more clarity on its price direction. According to a report by Arcane Research, the cryptocurrency managed to slowly break through critical resistance levels at $20,000, $20,700, and $23,000, which coincides with the conventional definition of an uptrend, such as defined by Investopedia:
An uptrend describes the price movement of a financial asset when the general direction is upward. In an uptrend, each successive peak and trough is higher than those found earlier in the trend. The uptrend is therefore composed of higher swing lows and higher swing highs. As long as the price hits these higher lows and highs, the uptrend is considered intact.
Arcane Research noted the following on BTC’s recent bullish momentum and its ability to break previous resistance turning them into critical support:
Bitcoin price is currently at an interesting level. $23,000 served as resistance in mid-June and two weeks ago and could potentially swing to a support level this week. If the price holds at the current level, it will mark another higher low and be a bullish signal.
In this sense, Arcane Research expects Bitcoin to continue to flirt with the $24,000 resistance and potentially break above it. This would signal a potential continuation of the uptrend with a potential target of $27,000 and $28,000, on shorter timeframes.
Why Bitcoin Is Likely to Hold Its Gains
Bitcoin’s price upside potential has been capped by macro factors, the collapse of major crypto companies and ecosystems, and increased selling pressure from BTC miners. The latter had to sell more of their BTC shares to service their debts in the face of rising energy prices and falling BTC prices, according to a report by QCP Capital.
In this sense, Bitcoin will have a limited ability to break above $28,000. Dealing desk coincides with Arcane Research, BTC price could revisit these levels, but another massive rally like the one seen in 2020 is unlikely to see.
On the contrary, the price of BTC could trade sideways as it recovers higher levels and registers lower lows at three critical support areas: $20,700, $17,500, and $10,000. The latter looks likely to be revisited at some point in 2022, according to QCP Capital.