Bitcoin price soars to $21,800, but analysts warn it may be an illusion

On July 7, the market saw positive price action as traditional markets rallied, and for many cryptocurrency investors, hope was ever alive.

The market's "green day" comes amid rising U.S. jobless claims, which Jamie Cox, managing partner at Harris Financial Group, believes could be a signal that "wage pressures may have peaked." According to Cox, a continuation of this trend could lead to financial conditions "tight enough for the Fed to rein in the size of rate hikes."

After trading near $20,400 for most of the day on July 7, the price of bitcoin (BTC) surged almost 7% in afternoon hours (UTC) to hit a daily high of 21,860, according to Cointelegraph Markets Pro and TradingView. Dollar.

As crypto faithful try to find a market bottom in the choppy waters of crypto winter, here's what several analysts predict is next for bitcoin.

The trend is still down

Twitter user "Roman" posted the following chart, noting that "many have become euphoric and bullish as we have repeated a similar candle pattern over the last 8 months."

In Roman's view, this is just the latest in a series of misjudgments that have led many traders to believe that a bottom has been reached when, in reality, the trend is still down.

Roman said,

“The reduction in trading volume within a certain range is the consolidation of the continuation trend. Not to mention the hundreds of thousands of funds flowing into the exchange before each peak.”

A rally above $23,000 would be bullish

Another trader who believes the trend is still clearly down is Twitter user Gilberto, who provided the chart below, noting that Bitcoin’s price recently broke out of a pennant pattern.

Gilberto said,

“Bullish above $23,000, daily trend remains down for now.”

As for Bitcoin’s potential price action, should it continue its downward trend, market analyst Crypto Tony has published the following chart outlining a “worst-case scenario” that could see Bitcoin bottom near $12,000.

Crypto Tony says,

"I don't think the next bull market will start until late next year, and the new bull market peak won't occur until 2024-2025. I already have a position at $22-24K, and if it goes down to $17-15K, I will also increase my position.”

Traders focus on the 200-week moving average

When it comes to indicators that are reliably used to help identify market bottoms, the 200-week moving average (MA) is one of the most popular and widely cited indicators traders use to identify good buying opportunities.

With Bitcoin now back below its 200-week moving average for only the fourth time in its history, speculation has begun about how long it will take to recover above this line, and what will be the willingness to trade once it does.

Reacting to this likely scenario, independent market analyst Michaël van de Poppe posted the following tweet, outlining what he thinks could happen once the 200-week moving average recovers.

There is likely to be plenty of liquidity above the 200-week moving average.

If Bitcoin breaks through this level, I think we could be up $2-5k to $28-30k in just a few days.

Then the mood also reverses.

— Michaël van de Poppe (@CryptoMichNL) July 7, 2022

At $957 billion, Bitcoin’s dominance rate is 43.1%. The total market capitalization of cryptocurrencies is currently