Bitcoin Price Analysis: BTC Retraces From $27,000-Level

Last Updated July 23rd 2021
6 Min Read

Daily Bitcoin BTC Price Forecast
  • The RSI in the daily chart has hovered into the overbought zone.
  • The MACD in the 4-hour chart shows increasing bearish momentum.
  • Shark Tank presenters butt heads over Bitcoin.

Bitcoin has been on a proper uptrend between December 12 and December 28, going up from $18,000 to $27,000. However, it looks like the sellers have chosen the $27,000 psychological level to cash out as the price has since dipped to $26,780.


Further Sell-Off On The Cards?

While the overall trend has been exceedingly bullish, certain technical indicators show that the buyers may be thinking about selling their coins. Firstly, in the daily chart, the relative strength index has hovered into the overbought zone. This shows that the premier cryptocurrency is presently overvalued.

btc/usd  daily chart 122920

Image: BTC/USD daily chart

The 4-hour chart adds further credence to our bearish outlook. As one can see, the moving average convergence/divergence (MACD) shows increasing momentum, so a further drop is definitely on the cards.

btc/usd 4-hour chart 122920

Image: BTC/USD 4-hour chart

The Bollinger band in the 4-hour time frame has begun to squeeze as well. The squeezing of the bands is indicative of low market volatility. It seems like the price is going through a consolidation period before it drops.


Mark Cuban Praises BTC Monetary Policy

Amidst Bitcoin’s soaring performance in the holiday season, it appears that a former BTC critic has changed his stance towards the flagship cryptocurrency. In an earlier tweet, billionaire investor and Dallas Mavericks owner Mark Cuban had announced that fans buying Mavericks gear would get a 25% discount when they used Bitcoin to make their payment. 

The gift card offer and acceptance of Bitcoin as a payment option struck many experts as odd due to Cuban’s history of demeriting the asset. In September 2019, he had said that he prefers bananas to Bitcoin as a commodity. 

In a recent tweet, Cuban seemed to praise Bitcoin’s programmatic monetary policy, saying that publicly traded companies would be wise to restrict their share inflation. 

However, it looks like his Shark Tank partner doesn’t share the sentiment.


Mr. Wonderful Warns Regulators Will Come Down Hard on Bitcoin

Shark Tank’s “Mr. Wonderful” Kevin O’Leary has recently warned about regulators coming down hard on Bitcoin. He added that “even if bitcoin were to go up another 2,000%, it’s completely irrelevant to institutional clients.” 

In a recent interview with CNBC’s Squawk Box, O’Leary was asked if he had changed his mind about BTC from thinking that it was “not a real currency” to investing in it. He replied, clarifying that he’s been “a cryptonian for years.” Taking his phone out, O’Leary pointed to his Bitcoin wallet. 

I’m involved in this because it’s fun but this is not an institutional product … This whole market, even if bitcoin were to go up another 2,000%, is completely irrelevant to the institutional clients.

The real problem is if you get involved in this as a fiduciary, and it gets regulated, and it gets cut in half or goes to zero, who knows what, you have never seen the mother of class action lawsuits that’s coming from that one. 

O’Leary was asked to comment on how Mark Cuban, the owner of Dallas Mavericks, recently began to offer merchandise discounts to customers paying with bitcoin. Cuban also recently said that Bitcoin was more of a religion than a solution to anything. 

O’Leary responded by saying that he knows Cuban very well. He said that Cuban was also earlier quoted when he said that bananas are a bigger common currency than Bitcoin. O’Leary added that Cuban is “probably right.” 

My whole point is for all of us … who monitor and work within the financial services’ multi trillion dollar global industry, is this a nothing burger? It’s not even a single cell amoeba.

O’Leary went on to say that “the financial markets deal with regulators, and you can only operate within the confines of those rules.” He asserted that many institutional investors do not want to own BTC because “they fear the regulator.” 

Bitcoin Activity In Nordic Region Get A Boost From Affordable Mining

Owing to a drop in electricity prices, cryptocurrency mining has significantly increased in the Nordic region. Heavy rains in the area have boosted production from hydro-electric plants, leaving Sweden and Norway with some of the world's lowest power prices. 

The miners’ recent luck follows several years of poor margins from higher electricity costs and lower prices for most digital currencies. According to a LiveMint report, Philip Salter, head of operations at Hong Kong-based Genesis Mining, which operates a data center in Boden, Sweden, said: 

The ones that stayed through the difficult period, like us, are quite happy now. There were times we were not making any profit at all, but during the last year our profitability has more than tripled. 

One of the most critical environmental benefits from basing the mining in the Nordic region is that electricity is almost carbon-free. The electricity comprises mostly hydro, nuclear, and wind power. Having coins flowing from the Nordic region also helps reduce the political risk profile of Bitcoin. 

Salter added:

There is a very important strategic shift away from mining in China to mining in western countries like Sweden as Bitcoin investors become more public and want more stability and critical safety. It is one of the biggest developments in Bitcoin mining to look out for.


Key Price Levels To Watch For BTC

If the price does drop, there are two crucial levels that we should be on the lookout for. Firstly, the 50-bar SMA ($24,500) in the 4-hour chart and secondly, the 20-day SMA ($22,600). If these two levels can’t control the downtrend, the price will fall below $20k.

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