Since July 10, within two weeks, the bitcoin price has declined from over $13,000 to $10,600, by more than 18 percent against the U.S. dollar.
At its lowest point this month, the bitcoin price came close to dipping below the $9,000 level, dropping to as low as $9,080.
Although BTC has shown relatively strong recovery throughout the past week, it has struggled to cleanly break out above $11,000, which has acted as a key resistance level for bitcoin throughout July.
Consolidation for bitcoin expected
Michael Novogratz, a billionaire investor and the CEO of Galaxy Digital, said that bitcoin is likely consolidating currently before initiating its next move higher in a statement.
“If BTC goes to $100, it is game over. It won’t. It’s already established itself as a store of value. Stop wasting your time with these tweets and go outside and enjoy the summer. BTC is consolidating before its next move higher,” he said.
Josh Rager, a cryptocurrency technical analyst and trader, indicated that from a technical perspective, bitcoin has not cleanly broken out of the $10,850 resistance level, which many traders have emphasized in the past several days.
“Daily time frame resistance did its job & price closed under after that $400+ wick It’s always good to wait for a retest to make sure a broken resistance holds as support & this is a clear example Neutral at the moment & still in range,” noted Rager.
When the bitcoin price initially moved past $10,500 after recording a nine percent rally within a span of minutes on July 19, traders indicated that the $10,850 resistance level would have to be breached to confirm that the short term trend of the asset is bullish.
“10.4 met. No violent reaction, no rejection – BTC looking decent. Let’s see reaction at this next resistance. Punch and close above $10,850 and things start looking substantially bullish,” one trader said at the time.
Bitcoin has not been able to reclaim $10,850 since then despite briefly surpassing beyond $11,000 on July 20.
As the bitcoin price slightly slumped since early July, precious metals like silver and gold are gearing towards having its best week in recent years.
Still, Equity Armor Investments executive Brian Stutland stated that crypto assets like bitcoin could appeal to investors in the medium term if interest rates in leading economies including the U.S. and Europe fall in the near term.
“I think the move out of fiat currencies is still real. If interest rates are going to stay below 2% in the United States, if they’re going to stay negative in Europe, [if] they’re going to stay flat in Japan, where else are you going to put your money? And that’s where you look at the metals, you look at cryptocurrency as a place to do that. So, silver might be a sell, but I think gold’s a buy,” he said.
Macro factors could contribute to the medium-term recovery of bitcoin and the rest of the crypto market in the upcoming months but in the short term, traders seemingly remain cautiously bearish in the trend of the market.
Click here for a real-time bitcoin price chart.