A key trendline which the Bitcoin price passed for the first time in over a month is currently seeing its first retest as support.
Bitcoin (BTC) staged its first test of critical support on July 21 as news that Tesla had liquidated most of its Bitcoin holdings subsided.
Bitcoin bulls attempt to flip key trendline to support
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD focusing on the $22,800 zone after dropping from multi-week highs of $24,280 on Bitstamp.
The pair had reacted swiftly but comparatively modestly to the revelation by Tesla that its Bitcoin position was reduced 75%, or $936 million, in Q2.
Comments by CEO Elon Musk which avoided direct criticism of the largest cryptocurrency appeared to help stem the losses. In the company’s earnings call, he stressed that the sell-off “should not be taken as some verdict on Bitcoin.”
The move nonetheless put an end to several days of rampant upside, BTC/USD rising in line with stocks as U.S. dollar strength fell from twenty-year highs.
$22,800 marks the 200-week moving average for the pair, a historically significant trendline lost as support in June and only passed in recent days.
Interesting times here for $btc, flipped resistance and the 200 wma (blue line)
Currently testing it as support which needs to hold for further upside.#crypto #btc https://t.co/SpLJELjq3L pic.twitter.com/cRKoQjaOC6
— (@AskCryptoWealth) July 21, 2022
For on-chain analytics resource Material Indicators, the immediate outlook was mixed. While daily timeframes expressed weakness, data still pointed to a broad recovery continuing on monthly chart.
“Could mean a retest of the 50 Day Moving Average is in the near future, but also means we may not have seen the monthly high. Tune out the noise and look at the charts,” it told Twitter followers.
The 50-day moving average stood in practically the same place as the 200-week moving average on the day.
An anatomy of a sell-off
Other analysts meanwhile showed how Tesla divested itself of its BTC holdings in mid-June.
Related: 100X Bitcoin energy use would mean ‘absurd’ $20M BTC price — developer
Over a several-day period last month, inflows to exchanges spiked as over 63,000 BTC was released by market makers (MMs).
MMs at Coinbase sent 63,638 $BTC to multiple exchanges, mostly Binance and Bitfinex, for the past 72 hours. All-time high in daily flows on June 12th.
They're executing someone(s)' orders.
Live Charthttps://t.co/WqbggqIoSD pic.twitter.com/r2gbnZ6yGG
— Ki Young Ju (@ki_young_ju) June 15, 2022
According to data from on-chain analytics firm Glassnode, meanwhile, news of the sell-off was yet to be reflected in a significant reshuffling of exchange balances from panic sellers or opportunistic dip-buyers on the day.
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