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(Kitco News) – Price action across the crypto market was flat on Monday following a weekend of high-flying meme coins as the cryptocurrency ecosystem remains on edge following the recent regulatory actions against taken against Tornado Cash.
The month-long uptrend for Bitcoin (BTC) has run into a firm wall of resistance at $25,000, where bulls have been soundly rejected in four attempts to break out higher over the past week. This suggests that a near-term pullback may be in the cards before a rally higher can succeed.
BTC/USDT 4-hour chart. Source: TradingView
The struggle to mount an effective push higher and continue Bitcoin’s price uptrend was addressed in the morning crypto update from Kitco contributor Jim Wyckoff, who warned that “bulls need to show fresh power soon to keep it alive.”
Taking a step back, Bitcoin’s recovery since the lows of June “has led to a buy signal from the weekly stochastic oscillator,” according to Florian Grummes, managing director at Midas Touch consulting.
“The recovery wave has also crossed the mid-trend line within the downtrend channel. Therefore, chances for a continuation of the recovery towards 29,000 USD to 30,000 USD are pretty good,” Grummes said in a letter to clients on Monday.
Overall, Grummes indicated that “it is still too early to speak of a sustainable trend reversal and the end of the crypto winter” while also noting that “a continuation of the recovery seems quite possible in any case and is the preferred scenario.”
As for what level to keep an eye on in the event of a bearish downturn, Grummes indicated that “the picture would degrade significantly” if the price of BTC fell below $22,000.
A short-term neutral bias
The struggle by Bitcoin bulls to mount a serious charge above $25,000 was also highlighted in an update from Katie Stockton, founder and managing partner of Fairlead strategies, who has adopted a neutral bias after BTC has “seen short-term momentum neutralize below cloud-based resistance near $25,000.”
In order for a short-term bullish bias to come into play, Bitcoin would need to breakout above $25,000 and challenge the next resistance level near $30,000, according to Stockton.
Ultimately, Stockton forewarned that “While intermediate-term momentum has improved, the weekly MACD is set up much like April when a relief rally failed, so we caution against acting upon the crossover.”
In the event that Bitcoin falls back below its 50-day MA near $22,100, Stockton said, “we would position for a retest of long-term support,” found between $18,300 and $19,500.
“Long-term downside momentum has yet to improve behind bitcoin despite a long-term oversold reading, increasing risk of the downtrend resuming,” Stockton cautioned.
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