Bitcoin Price Analysis: BTC spikes to $42,000, prepares for a slow retracement to $40,000 next?

TL;DR Breakdown

• BTC established another higher low overnight.
• Bitcoin rallied to $42,000 overnight.
• Market ready for a reversal.

Bitcoin price analysis indicates bearish momentum to follow over the next 24 hours as a rapid spike higher was seen overnight, and the $42,000 price mark was reached. Therefore, we assume bulls are exhausted as of now, and a retracement is expected later today.

The cryptocurrency market trades with a strong gain over the last 24 hours. Bitcoin is up by 7.38 percent, while Ethereum by 5.2 percent. Solana (SOL) is among the best performers, with a gain of 15 percent.

Bitcoin price movement in the last 24 hours: Bitcoin rallies above $42,000

BTC/USD traded in a range of $38,747.48 – $42,235.55, indicating strong volatility over the last 24 hours. Trading volume has increased by 23.5 percent and totals $32.55 billion. Meanwhile, the total market capitalization stands around $779.75 billion, resulting in market dominance of 47.95 percent.

BTC/USD 4-hour chart: BTC ready to reverse?

On the 4-hour chart, we can see the Bitcoin price rejecting further upside above $42,000 after a strong spike higher, indicating an upcoming retracement.

Bitcoin price action has seen strong bullish pressure over the last week. After a slightly lower swing low was set around $29,500 on the 20th of July, BTC/USD started to rally.

The previous several-week descending resistance trendline was broken on the 23rd of July, sending a signal to the bulls that a lot more upside can be expected. Over the next days, Bitcoin price continued to rally, with the overnight spike above the $42,000 mark, indicating a total gain of around 45 percent.

Therefore, the overall market is extended now, and we can expect a retracement to be seen over the next 24 hours. In case a higher low is set, BTC/USD will attempt another push higher. However, if a lower high below $38,000 is set, we can expect a much deeper, medium-term retracement to follow over the next weeks.

Bitcoin Price Analysis: Conclusion 

Bitcoin price analysis indicates bearish momentum to follow over the next 24 hours as further upside was rejected earlier today after a rally above $42,000. This price action development should lead Bitcoin towards another retracement later today, where another slightly higher low will likely be set. 

While waiting for Bitcoin to decline further, read our guide on Bitcoin fees, DeFi advantages, and Satoshi Nakamoto.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

Source: https://www.cryptopolitan.com/bitcoin-price-analysis-2021-07-31/