Analysts say volatile Bitcoin price action is typical of low liquidity markets

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On July 9, Bitcoin and the broader cryptocurrency market experienced a moderate rally of relief that recovered some of the losses seen on Thursday, but a handful of analysts continue to warn that BTC could still drop to the range of $ 24,000 to $ 29,000 in the short term.

Data from Cointelegraph Markets Pro and TradingView shows that the price of Bitcoin was bid higher during the morning trading hours on Friday and managed to climb back above $ 34,100.

BTC / USDT daily chart. Source: TradingView

Sentiment among traders rose slightly after the price of Bitcoin reversed course and returned to $ 34,000, but the price still remains trapped between key resistance and support levels and the lack of volume of purchase is still a valid concern.

Tempting Beef, a pseudonymous crypto trader on Twitter, also pointed out that the total crypto market cap and the altcoin market cap remain in a precarious position.

#Crypto’s total market cap and altcoin market cap fail to reverse their key pivots and form lower highs. Me sad.

Unless we put it together, I would expect us to just play in that lineup, maybe with stars like $ AXS. It could be a boring summer. pic.twitter.com/Ab4eVSCbdo

Tempting Beef (@tempting_beef) July 8, 2021

lie Le Rest, partner of digital asset management company ExoAlpha, also pointed out that in addition to the non-directional trend of BTC, the market is also “witnessing a decrease in trading volume which has led to” no more wild reversals in the fork, hurting directional traders.

The Rest said:

Within this range we are seeing pumps and dumps with prices slowly rising before quickly slammed, typical of low liquidity markets.

Due to market volatility, Le Rest sees market players sitting on the sidelines waiting “for the Grayscale trust to stop offloading their Bitcoins and the Chinese regulatory crackdown to calm down.”

The Rest also pointed to the scrutiny that financial regulators around the world are giving Binance, as a significant problem that reduces the market’s ability to secure the inflow of capital needed to exceed $ 40,000.

According to Le Reste:

Despite these elements already assessed by the market, we continue to see a strong adoption of Bitcoin by traditional asset managers looking for a good entry point to position for the next step. Signs of support above $ 30,000

While it is true that the price of BTC fell below the weekly support level of nearly $ 34,500, pseudonymous Twitter analyst Rekt Capital was quick to point out that the price found support at a low. another support level established near $ 32,200 resulting in no major trend changes.

Related: Bitcoin Is A Miracle & Better Than Gold, Says Wozniak, Apple Co-Founder

One possible bullish indicator highlighted by some analysts is the Bitcoin ‘net entity growth’ metric, which has reached new highs in recent weeks as the price of BTC languished below $ 40,000.

Net growth of Bitcoin entities. Source: Glassnode

In times like these when uncertainty prevails, the simple dollar cost averaging strategy is one that even the most experienced traders look to in order to reduce stress and refocus on the price outlook. long-term.

If the price of Bitcoin drops, I will buy more.

If the price of Bitcoin increases, I will also buy more.

That’s the beauty of the average dollar cost.

The Wolf of Every Street (@scottmelker) July 8, 2021

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research before making a decision.

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