FX.co ★ Technical Analysis of BTC/USD for July 31, 2023

Crypto Industry News:

The Kyrgyz Republic, a state bordering China, is increasing its cryptocurrency mining activities with the support of the local government. The country's president, Sadyr Yaparov, has approved the construction of a farm at the Kambar-Ata-2 hydroelectric power plant, Kyrgyzstan's national Kabar news agency reported. The Kyrgyz government plans to spend up to $20 million for this purpose.

According to the president, running a cryptocurrency mining farm will allow the government to avoid energy losses associated with unused electricity from power plants, the report reads.

Since the "launch" of Kambar-Ata-2 in 2010, Kyrgyzstan has lost 6.8 billion kilowatt-hours (kWh) of energy, Yaparov said. By setting up a mining farm, the Kyrgyz government will be able to use the remaining energy wisely and benefit the country's budget, the president noted, stating:

"As soon as the mining farm is operational, the money earned will go to ordinary people. Every kWh will be under control. Everything will be automated and under our control."

The report somewhat contradicts recent energy news in Kyrgyzstan. On July 24, the president of Kyrgyzstan declared a state of emergency in the country's energy sector, which is scheduled to start on August 1, 2023. Its end is scheduled for December 31, 2026. According to official figures, the emergency is caused by climate challenges, low water inflow to the Narynnia basin and lack of generation capacity due to excessive increase in energy consumption.

In the latest report, Kabar Japarov emphasized that cryptocurrency mining will be subject to the highest rate available in Kyrgyzstan, which is about 5 Kyrgyz soms ($0.057) per kW.

Technical Market Outlook:

The BTC/USD pair has bounced from the local low seen at the level of $28,880 and the bounce extended above the short-term trend line resistance seen at the level of $29,263. The intraday technical resistance is seen at the level of $30,447, but now the level of $29,623 will act as the technical resistance as well. The momentum is weak and negative which supports the short-term bearish outlook for BTC. So far the bulls are bouncing up from the lows, but in a case of a breakout lower, the next target is located at $28,446 (this level will work as the technical support and the line in sand for bulls).

Weekly Pivot Points:

WR3 - $30,065

WR2 - $39,681

WR1 - $29,562

Weekly Pivot - $29,316

WS1 - $29,148

WS2 - $28,983

WS3 - $28,567

Trading Outlook:

The bulls broken above the gamechanging level located at $25,442, so now the mid-term outlook for BTC is bullish. The last pull-back has reached the 38% Fibonacci retracement and the market is ready to continue the up move. The next target for bulls is seen at the level of $32,350. As long as the level of 19,572 is not clearly violated, there is a chance for a long-term up trend to continue.