A key trendline which the Bitcoin price passed for the first time in over a month is currently seeing its first retest as support.
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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
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 United States 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.
— (@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 the 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.
Over a several-day period last month, inflows to exchanges spiked as over 63,000 BTC was released by market makers (MMs).
— Ki Young Ju (@ki_young_ju) June 15, 2022
According to data from on-chain analytics firm Glassnode, meanwhile, news of the sell-off had 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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