After weeks of low volatility, Bitcoin bulls are not making enough effort and the price remains trapped in a narrow range. Selling pressure at resistance levels indicates a weak belief in sustained upward movement in the market. On the other hand, DXY readings are also unfavorable for BTC and the rest of the crypto.
Bitcoin has been stuck in a narrow range in August. Volatility has significantly decreased, which now forces an imminent expansion. The only problem is the impossibility of determining when this breakout will occur. Therefore, investors can protect themselves from significant losses by staying cautious and staying in a contra-position before a major move.
One reason that could create pressure on risky assets is the rise in the US dollar index for four consecutive weeks. In contrast, the United States stock markets have entered a corrective phase in the past few days. The S&P 500 Index (SPX) and the Nasdaq Composite Index have retreated in the past two weeks, indicating a search for profit by short-term investors.
The US dollar index confirmed its strong position by receiving support from the 20-day EMA on August 4th and August 10th. In the coming days, a visit to the 106 level seems likely for DXY.
Bitcoin fell below the 20-day EMA (29,458 dollars) on August 13th and bounced back to the 29,600 region yesterday. As of the time of writing, BTC finds buyers at 29,400 dollars. Some analysts are suggesting that bears are also exhausted like bulls. Despite the selling pressure at critical resistances, the price has been unable to stay below 29,250 dollars for some time.
The flat 20-day EMA and the RSI close to the midpoint confirm a balance between buyers and sellers. The boring movement between 28,585 dollars and 30,350 dollars for BTC could continue due to this balance. The next trend movement is likely to begin after the price breaks out of this range. If the price falls and loses the 28,585 support, investors will expect the selling to continue until 26,000 dollars.
On the other hand, if we see closures above 30,350 dollars, it will open the door to a new annual high after 31,500 and 32,400 dollars.