Bitcoin (BTC), Price Prediction for July 25,

Bitcoin is currently trading at $115,600 following a sharp intraday drop that broke through the lower boundary of a descending channel on a 4-hour chart. This move also broke the ascending trendline that had held support since early July. This raises concerns about a possible trend shift as momentum stalls.

What’s happening with Bitcoin’s price?

Since mid-July, Bitcoin’s price has been coiled inside a parallel channel that descends. The recent breakdown under $116,000 indicates that the bears are trying to seize control following multiple failed bullish efforts near the $118.800 to $119.200 resistance area. Price has now deviated from the lower bound of channel and closed below the dotted ascending pattern that previously supported each major bounce in this month.

This breakdown is significant, especially in light of the rejection from the middle of the channel earlier in the week and the sharp bearish candle that followed. If the daily close confirms that it is below $115.300, sellers could push the price down to $113,000 and lower.

Why is the Bitcoin price going down today?

The main reason for the Bitcoin price dropping today is due to clear bearish divergences, and exhaustion signs visible on lower timeframes. On the 30-minute chart RSI has collapsed to 26,9, firmly oversold, while MACD is expanding negatively, with both signal lines continuing to trend deeper below zero. This indicates building bearish momentum.

The Smart Money Concept chart for the 1-day timeframe also shows that BTC has rejected a weak low near $118.500 and is now pulling away from a previous Break of Structure area between $112,000 to $113.500. This region was previously a demand area and could be the next target for sellers if they maintain control.

Derivatives data confirms this shift. Volume jumped 31.75 per cent and open interest soared 6.89 per cent to $88.3 Billion, but the long/short ration fell to 0.933. This is a clear indication that shorts have dominated in the past 24 hour. Liquidations reached $154.4 million with $138.2 in long positions being wiped out. This indicates that a large-scale flushing of leveraged longs was responsible for today’s move.

Bollinger Bands & EMA Structure Signal Volatility spike

The Bollinger Bands for the 4-hour time frame have expanded rapidly as Bitcoin’s volatility has increased. After days of compression the price broke below lower band at $116.100 and briefly reached $115.100 before attempting to mildly rebound. This volatility expansion is usually a result of a range-bound phase, and confirms a new direction.

The 20, 50, 100 EMAs have now started to curve downward. The 100 EMA is at $116.528 while the 200 EMA is near $113.545 and these are critical levels. BTC is currently below all of them and indicating a short-term shift to the bearish. Upside moves will be stifled unless bulls reclaim their EMA cluster above $117,000

Bitcoin is still in a rising channel on the weekly timeframe. However, the rejection last week near $120.300 and the red candle this week suggest that the upper channel resistance has remained firm. If daily structure does not recover soon, a further pullback towards the median line near $100,00 is possible.

BTC price prediction: short-term outlook (24H)

If Bitcoin price fails to decisively bounce above $116.200 today, the breakdown may extend towards $113.500, where the 200 EMA overlaps with the prior demand zone. If the price falls below this level, the next target is around $112,000 to 111,000, which is marked by the daily BOS liquid cluster.

BTC needs to recover above the $116.800 to $117.200 EMA zone in order to regain bullish momentum. It must also re-enter into the descending channel. A sustained move above the $118,000 level would allow for a retest at $119,500, and the recent high of $120,300.

The current momentum is bearish, and traders should wait for confirmation near $113.500 before they attempt long setups.

Bitcoin price Forecast Table: July 25, 2020

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