Bitcoin (BTC) returned under $20,000 on June 29 as analysts stayed hopeful of a trip higher.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Traders looks to $19,500 for support
The weakness followed rangebound behavior near $21,000, this characterizing a market still in tune with moves in global equities.
The S&P 500 had finished its previous session down 2%, while the Nasdaq Composite Index lost 3%. On the day, Hong Kong’s Hang Seng was likewise 2.1% lower, while China’s Shanghai Composite Index traded down 1.4%.
With few bullish cues coming from macro, Bitcoin thus had little stopping it from revisiting the lower end of a range in place for several weeks.
“Bitcoin is giving that correction, was anticipating a potential low at $20.3K,” Cointelegraph contributor Michaël van de Poppe wrote in part of his latest Bitcoin-focused Twitter update.
“We get $20.1K as that’s the second important one… Would like to see it hold here and see additional confirmation on LTF. If it doesn’t, $19.3-19.5K next for support.”
Zooming out, other sources were still optimistic about the potential for an assault on resistance further up.
For on-chain analytics resource Material Indicators, this could still come in the form of challenging the 200-week moving average, a key bear market support level, which had begun to function as resistance in June.
Trend Precognition is flashing a pretty strong Long signal on the #BTC Weekly chart. Signal won’t print until the W candle closes, but indicates that we could see a run at the 200 WMA this week. Happy to test the lows first. For me, sub $17.5k invalidates. #NFA pic.twitter.com/hvs1as44qG
– Material Indicators (@MI_Algos) June 28, 2022
Stocks continue downhill
Focusing on macro, commentators argued that with little certainty about economic strength available, risk assets such as crypto would continue to suffer on longer timeframes.
The mood followed a prediction from Big Short investor Michael J. Burry that the U.S. Federal Reserve would abandon its inflation-busting quantitative tightening (QT) policy in 2022 and return to more accommodative conditions.
“Deflationary pulses from this- -> disinflation in CPI later this year –> Fed reverses itself on rates and QT –> Cycles,” part of a tweet published June 27 reads.
Only a clear boon for risk assets would therefore cut Bitcoin and altcoins some slack, popular Twitter account TXMC Trades responded, this perspective echoing views of various commentators including former BitMEX CEO, Arthur Hayes.
Despite the dreams of decouploors, #Bitcoin is unlikely to grow in a sustained way unless the economy also shows significant improvement, as they are undeniably linked.
– TXMC (@TXMCtrades) June 28, 2022
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