Bitcoin Key Support Level: Can It Hold $29,250 Ahead of Monthly Candle Close?

Bitcoin (BTC), the world’s largest cryptocurrency, has seen a sharp decline recently, reflecting a broader downturn in the cryptocurrency market.

This has raised concerns among bitcoin bulls, who closely monitor the cryptocurrency’s price action to determine whether the decline will continue or whether the market will stabilize.

Negative Volatility Threatens Support for BTC

According According to crypto analyst Rect Capital, bitcoin is hovering below the important $29,250 support level. This is an important boundary for bitcoin bulls, as a sustained breach of this level could trigger a macro trend change and a retest of lower support lines.

Rect Capital says bitcoin has more than a week to hold this support level, with the July monthly candle close an essential milestone. However, the analyst also cautioned that there is still plenty of time for the market to shock investors with potential volatility below this level.

BTC is currently trading at $29,000, having momentarily lost the $29,250 50-day moving average (MA). This is aligning with the squeeze momentum indicator for bitcoin, which points to a downtrend cycle. Historically, such cycles have resulted in consolidation periods of 15 to 30 days followed by sharp declines like the ones BTC experienced recently.

However, there is positive news for the bulls as the Average Directional Index (ADX) indicator for BTC is rising, indicating a loss of momentum in the current downtrend.

Nevertheless, if the current decline continues, the only notable support lines will be at $28,200, $28,100, $27,200 and the 200-day EMA, which is key to bitcoin’s long-term trend and is currently at $26,800.

The bulls need to hold the 200-day MA, as losing it could compromise the current bullish trend.

bitcoin on edge

On the other hand, the broader crypto market is under pressure ahead of the upcoming interest rate decision on Wednesday. however, According For the crypto trader known as The Wolf of Few Streets, bitcoin’s support levels of 28,800 and 28,300 should prevent a significant decline.

Traders believe that the bitcoin market has already priced in the expected rise. Ideally, the market should rise above either of these levels to test $32,000 again after the release of interest rate data on Wednesday.

Additionally, Wolf of Few Streets is bullish on positive news emerging regarding exchange-traded fund (ETF) decisions, which could further support the market.

Traders do not see any immediate downside for BTC and believe that minor liquidation of long positions is long overdue, making the timing right to decline. However, The Wolf of Few Streets isn’t expected to stay this fall for long.

Overall, The Wolf of Few Streets remains bullish on bitcoin and believes that the current market pressure is temporary. Trader analysis suggests that the support level will hold, and positive news regarding ETF decisions could provide further support.

Featured Image from iStock, Chart from Tradingview.com