Bitcoin fails to flip $40K with traders eyeing $36K or lower for support

Market Analysis

Bitcoin (BTC) saw tough resistance after nearing $41,000 on July 28 amid calls for consolidation of recent gains.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

$40,000 yet to stick as new support

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD pulling back below the $40,000 mark as Wednesday progressed. 

The pair had begun with a fresh surge which took it towards heavy range resistance but ultimately lacked the momentum to change its existing paradigm.

At the time of writing, Bitcoin focused on $39,500, having dipped to lows of $39,300.

For Cointelegraph contributor Michael van de Poppe, a retracement was not only welcome but essential for cementing new higher levels – and the prospect of a further breakout.

Bitcoin, he said on Wednesday, needed to close out a higher low.

“What you want to see after such a move is the price is going to make a higher low, and preferably you want to see it happen in the range around $34,500,” he explained, noting that this was previously an area of interest.  

Either side of that level for higher low constructions were $32,500 and $36,000, he added.

Adopting a cautiously bullish short-term view, crypto trading company QCP Capital meanwhile acknowledged that the range ceiling ($42,000) would be unlikely to shift prior to Friday’s options expiry event.

“Technical analysis aside, our sense is that the market will keep looking to trade within this 30-40k range in the near-term,” the firm told Telegram channel subsrcibers.

“Into Friday’s month-end expiry, we expect 40-42k to hold as the OI peaks here with 11k BTC notional (Chart 5). We expect this level to act as a magnet into Friday’s expiry with the long gamma in the market pinning it to this price region.”

Never mind the golden cross

A further topic on traders’ lips on Wednesday concerned a longer-term phenomenon: the so-called “golden cross.”

Related: GBTC premium matches Bitcoin price crash levels as unlocking fear fades

Formed by the rising 50-day moving average crossing above the 200-day moving average, a golden cross is the opposite of a death cross, a feature which sparked considerable debate when it entered the BTC/USD chart in mid-June.

Now, thanks to this week’s price uptick, the possibility of a golden cross and its associated bullish implications were “not insignificant,” Van de Poppe said, while arguing that as a feature, it has little importance to the market overall.

Fellow trader and analyst Rekt Capital likewise entertained the golden cross narrative, forecasting its fulfilment as soon as next month.

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