Bitcoin Technical Analysis: BTC Drops After Meeting Resistance At The 20-day SMA

Daily Bitcoin BTC Price Analysis

Last Updated July 23rd 2021
3 Min Read
  • The Bitcoin price must take down 50-day SMA to reverse sentiment.
  • The MACD shows sustained bullish market momentum.
  • The Bitcoin price crashed from $40,500 to $31,500 between June 15 and June 21 and reversed the 20-day SMA and the parabolic SAR from bullish to bearish. Since then, BTC has been going ups and downs, with the buyers and the sellers playing a tug-of-war.

    Bitcoin Price Drops At 20-day SMA

    The Bitcoin price has been trending horizontally between the 31,500 support and the 20-day SMA since June 22. The MACD shows sustained bullish market momentum. However, it seems like the buyers have run out of steam at the 20-day SMA and dropped to $34,800.

    Image: BTC/USD daily

    BTC/USD daily chart 063021

    Bitcoin price has massive resistance at the 20-day SMA ($35,600). As per the IOMAP, over a million addresses had previously purchased almost 500,000 BTC at this level.

    Image: IntoTheBlock

    BTC/USD volume chart 063021

    El Salvadorans Not Forced To Use Government Wallet

    El Salvador's pro-Bitcoin president, Nayib Bukele, recently clarified that citizens are not forced to use the government-issued “Chivo” Bitcoin wallet. Bukele took to Twitter to clarify any misinformation about the government’s Bitcoin wallet application. 

    The new Bitcoin wallet, called Chivo, is slang for “cool” in El Salvador, and it can hold both Bitcoin and USD. Bukele stated it is just one of many crypto wallets that can be used, emphasizing its interoperability with other wallet apps.

    To allay privacy concerns, he added that the personal information requested by the wallet is already possessed by the government, emphasizing any requests for personal data within the app are for security purposes.

    Bukele also highlighted that the Chivo wallet would not incur fees or commissions for transfers, noting that, unlike traditional crypto exchanges, it will not take a cut for converting BTC to USD and vice versa. Unlike credit cards, there will be no commissions charged to merchants or users.

    Bukele stated that any money held or received in USD or BTC in the Chivo wallet will be able to be withdrawn into USD cash at any time once the government has completed its roll-out of 200 new physical Bitcoin ATM branches, dubbed “Chivo Points” or “Chivo ATMs.”

    The president also clarified that the $30 government BTC handout announced on June 25 would not be convertible into USD, emphasizing the administration’s intention to encourage the use of Bitcoin and the Chivo wallet.

    Bitcoin Price On-Chain Analysis – Santiment

    BTC/USD santiment chart 063021

    "#Bitcoin, despite jumping back above $36,000 Tuesday, is still seeing an extremely #bearish sentiment here on #Twitter. Historically, when crowd #FUD is this notable it's a much lower risk opportunity to get in while traders are awaiting lower prices."

    BTC/USD santiment chart 2 063021

    “#Bitcoin jumped back above $36k Tuesday before a mild decline. An encouraging sign is that one of our popular leading indicators, 1-year MVRV, still indicates that average traders are in the negative, indicating the low-risk buy time still has legs.”

    Bitcoin Price On-Chain Analysis – Glassnode

    BTC/USD glassnode chart 063021

    “Last week, the largest dollar value capitulation in #Bitcoin history occurred, with over $3.45B in net losses realized on-chain. Losses are realized when coins purchased higher, are spent at lower prices.”

    BTC/USD glassnode chart 2 063021

    “Consequently, we are seeing a significant decline in #Bitcoin network activity. The number of active addresses has been falling off a cliff, reaching values not seen since early 2019.”

    BTC/USD glassnode chart 3 063021

    “This is in consequence of the shakeup of #Bitcoin's hash rate following China's mining crackdown. It is the largest drop in hash rate in the era of industrial mining. As of today, mining difficulty is expected to drop by ~25% this Friday.”

    Bitcoin Price Is Expected To Reach These Levels

    The buyers have a very simple job. They need to reclaim the 20-day SMA and push BTC up to the 50-day SMA. Upon doing that, the Bitcoin price should flip the parabolic SAR from negative to positive.