Bitcoin rose 2.85% against the dollar to $32,509 on Tuesday, June 22. After sinking to a local low of $28,805, the price gained 12.86%, followed by 18.3% on Wednesday. The price action dropped 3.9% below the $30k mark and ricocheted upward from the channel. Some investors bought into the dip to keep the price above $30k. Longs liquidated in BTC stood at $348 mln, and shorts at $206 mln.
At the end of the day, a pin bar formed along with a false breakout of the $31,800 support level. It shaped up from lows of $30,000 (May 19) and $31,000 (June 8). Panic selling of cryptocurrencies has subsided. The price action stopped at the lower line of the channel. The setup is simple. We connect the tops of $42,451 and $41,330 and apply a parallel line to the $30k low. By the time the price retraces to $40k, it will have two legs at $30k and $29k. The rebound holds out hope for continued growth, at least to $40,850 (the upper bound of the channel).
China has cracked down on miners and banned trading. Hardly anything could be worse than this news. Negative market dynamics can be expected to persist in the short term. The bitcoin bulls will need to try hard and convince the whales with bulk buying volumes not to dump their crypto holdings brought on exchanges. A 20% rebound is all well and good, but as trends in a thin market have aptly shown in the past, such rebounds have been snuffed out on more than one occasion.