"This is just on-chain sentiment, though. The big question is, how does that correlate to the price action in general?" Both small and rich Bitcoin (BTC...
"This is just on-chain sentiment, though. The big question is, how does that correlate to the price action in general?" Both small and rich Bitcoin (BTC...
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A welcome retracement should involve a bounce at a minimum of $32,500, forecasts assume after heavy resistance hits BTC/USD.
Bitcoin (BTC) saw tough resistance after nearing $41,000 on July 28 amid calls for consolidation of recent gains.
The pair had begun with a fresh surge which took it towards heavy range resistance but ultimately lacked the momentum to change its existing paradigm.
At the time of writing, Bitcoin focused on $39,500, having dipped to lows of $39,300.
For Cointelegraph contributor Michael van de Poppe, a retracement was not only welcome but essential for cementing new higher levels - and the prospect of a further breakout.
Bitcoin, he said on Wednesday, needed to close out a higher low.
"What you want to see after such a move is the price is going to make a higher low, and preferably you want to see it happen in the range around $34,500," he explained, noting that this was previously an area of interest.
Either side of that level for higher low constructions were $32,500 and $36,000, he added.
Adopting a cautiously bullish short-term view, crypto trading company QCP Capital meanwhile acknowledged that the range ceiling ($42,000) would be unlikely to shift prior to Friday's options expiry event.
"Technical analysis aside, our sense is that the market will keep looking to trade within this 30-40k range in the near-term," the firm told Telegram channel subsrcibers.
"Into Friday’s month-end expiry, we expect 40-42k to hold as the OI peaks here with 11k BTC notional (Chart 5). We expect this level to act as a magnet into Friday's expiry with the long gamma in the market pinning it to this price region."
A further topic on traders' lips on Wednesday concerned a longer-term phenomenon: the so-called "golden cross."
Formed by the rising 50-day moving average crossing above the 200-day moving average, a golden cross is the opposite of a death cross, a feature which sparked considerable debate when it entered the BTC/USD chart in mid-June.
Now, thanks to this week's price uptick, the possibility of a golden cross and its associated bullish implications were "not insignificant," Van de Poppe said, while arguing that as a feature, it has little importance to the market overall.
Fellow trader and analyst Rekt Capital likewise entertained the golden cross narrative, forecasting its fulfilment as soon as next month.
#BTC's fantastic recovery continues— Rekt Capital (@rektcapital) July 28, 2021
And so the 50-day EMA continues to flick up
This means that a potential new Golden Cross could happen as soon as by mid-August 2021$BTC #Crypto #Bitcoin https://t.co/JQzbmCAcR2 pic.twitter.com/k7yZrsn1KK
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A surge towards $40,000 brings hope to those who have endured months of bearish drawdowns, but is it enough to continue the bull market?
Bitcoin (BTC) is nearing $40,000 this Monday as a new week gets underway with a bang for bulls.
A calm but confident weekend culminated in a dramatic run-up overnight Sunday, with BTC/USD swiftly nearing the top of its multi-month trading range.
With favorable fundamentals and a lot of liquidated bears, Bitcoin looks set to investigate levels not seen in several weeks.
What could shape price action as the week continues? Cointelegraph takes a look at five factors to consider when charting BTC price action in the coming days.
Spot price action is, naturally, the topic on everyone’s radar at present — in 24 hours, Bitcoin has sealed gains of nearly 15%.
While not yet flipping $40,000 to resistance, current levels have not been around since mid June, and appetite for bullishness is palpable.
It began slowly following last week’s “The B-Word” conference, which featured praise of Bitcoin from the likes of Jack Dorsey and Elon Musk.
A breakout was not immediately apparent, however, and progress was slow as analysts remained wary of a market that they thought could still easily collapse to new cycle lows.
In the event, however, Bitcoin slowly inched up through the week, taking out $34,500 over the weekend and opening up the prospect of a run higher.
An impulse move was widely anticipated, including by Cointelegraph contributor Michaël van de Poppe, with potential targets lying within the established medium-term range with $42,000 as its ceiling.
On Monday, however, even van de Poppe appeared taken aback by the veracity of the move higher, calling it a “surprise.”
“After such a move of Bitcoin, altcoins will follow suit,” he predicted on Twitter.
“Some are doing great in their BTC pairs, as Cardano and Ethereum are bouncing nicely. Great!”
Fellow trader Crypto Ed was more cautious. Highlighting Elliott Wave analysis, he argued that even a return of the bull market would not be without its sticking points, and that $29,000 could still return after $42,000 in line with his previous predictions.
For those who follow Elliott Wave: technically spoken, the move to new lows is still possible as long as we don't break white 2.— Crypto_Ed_NL (@Crypto_Ed_NL) July 26, 2021
But based on the lower TF labelling of this impulsive move, I'd expect a break above 2 and invalidating the move ot 26-27k
“Doesn't mean we go up in 1 straight line, pullbacks/corrections/retests will happen after we break 42k but new lows are very unlikely to happen once 41.5-42k is broken,” he reasoned Monday.
Bitcoin’s declining relationship to traditional markets is back in the spotlight, making price action look all the more “impulsive.”
Whereas rising stocks have been accompanied by flat or even negative performance in BTC/USD recently, the tables have turned over the past few days. Now, equities are treading water over headwinds from China, while Bitcoin soars.
A crackdown from Beijing has overshadowed previous strength in U.S. markets, and this combined with increasing worries over inflation and central bank stimulus tapering makes for a shaky mood, an analyst told Bloomberg Monday.
“The second half of the year is going to be this glass half-full, half-empty context,” Virginie Maisonneuve, global chief investment officer for equity at Allianz Global Investors, told the publication’s TV network.
As Crypto Ed continues to stress, meanwhile, the strength of the U.S. dollar is also worth paying attention to in the short term. Currently still on a rebound, the U.S. dollar currency index (DXY) is expected to hit local highs around the 94 mark before falling again, this latter move giving Bitcoin some real breathing space.
Until then, however, DXY could ultimately pressure cryptocurrency markets.
“Expecting DXY to drop more in coming days, BTC should see more relief bounce because of that,” he said Thursday alongside an accompanying chart.
“As tweeted a couple of times before: real strength for crypto returns when DXY completed the move to the red box and goes for the green box.”
Is up always good? Not if you’re short BTC.
As commentators were already suggesting recently while BTC/USD was still close to $30,000, the “maximum pain” scenario would likely not be fresh losses, but rather a dramatic reversal to the upside.
That is exactly what happened — the 15% overnight gains took a serious toll on those market participants who were convinced that a crash was incoming.
According to monitoring resource Bybt, 24-hour liquidations totaled $1.1 billion on Monday, the most since May 18.
“$111,000,000 of shorts liquidated in 10 minutes,” analyst William Clemente added, citing further data from analytics firm Glassnode.
It’s far from the first time that bears have been caught unaware — the nature of Bitcoin has ensured time and time again that those who are overly negative ultimately get pushed out.
A recovery in Bitcoin fundamentals which has been underway much longer than price continues unabated this week.
Hash rate is approaching 100 exahashes per second (EH/s) again, a positive sign which has been accompanied by increasing decentralization of hash rate overall.
Gains have been brisk over the past week when the hash rate was still lingering near local lows of 83 EH/s. At its height before the price drawdown in May, the hash rate reached 168 EH/s.
A similar story is apparent in network difficulty, which at the time of writing is forecast to increase by around 3.7% at the next readjustment in five days’ time.
If it happens, it will be the first positive difficulty change since May’s mining rout, and a strong signal that the effects of the accompanying upheaval have been mitigated.
While dubious as a topic, the concept of Bitcoin’s “eco-friendliness” remains an important topic, with large miners leveraging the narrative to reassure skeptical markets of Bitcoin’s longevity.
The statistics speak for themselves — renewable and sustainable energy is increasingly powering the Bitcoin network as miners relocate to suitable jurisdictions.
Those worried that the price gains may be a case of “too much too soon” can take heart in the relatively calm sentiment which has accompanied them.
According to the Crypto Fear & Greed Index, the shift towards $40,000 has not changed the overall market mood based on “fear.”
On Monday, the Index measured 26/100 — signaling fear, rather than greed or a “neutral” atmosphere — with the implication that Bitcoin could rise further without investors feeling overly greedy and apt to spark a sell-off.
“Bitcoin fear and greed index has been under 40 for over 2 months - the longest ever time period,” Danny Scott, CEO of exchange Coin Corner, noted last week.
“Yet we're still at $30,000+”
The past months have seen “extreme fear” reign, meanwhile, a trait which recently also characterized traditional markets.
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Bitcoin (BTC) emerges into a new week with middling price action and optimistic fundamentals — what could the coming days have in store?
Still holding $30,000 support, there’s little about Bitcoin to truly excite traders, but volatility has already reminded them of its presence over the past week.
As a recovery in mining continues, everyone is playing a game of “wait and see” when it comes to the 2021 Bitcoin bull market.
Cointelegraph takes a look at five things that might give BTC price action some direction in the short term.
It’s a classic summer picture in equities — a slight comedown last week followed all but constant gains, with caution coming from Covid-19, inflation and other triggers.
This time of year, however, is renowned for its lack of action, and even recent changes amount to little on a wider scale.
“The Covid backdrop is just one of several factors that may be adversely impacting the reflation trade,” Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, wrote in a note quoted by Bloomberg.
The U.S. dollar gained some strength from the modest shake-up in stocks, with the U.S. dollar currency index (DXY) climbing toward 93.
As Cointelegraph reported, DXY’s inverse correlation to Bitcoin remains in the spotlight for some — a short-term peak for the index may correspond to price pressure for BTC/USD.
Another focus is oil on the back of a lessening of tensions among OPEC+ members and a fresh agreement to boost output. While traditionally less impactful on Bitcoin behavior, any unexpected volatility can provide fuel for a low-volume cryptocurrency market.
This was witnessed last week, as reports of Bank of America greenlighting Bitcoin futures trading for select clients swiftly sent BTC/USD $1,000 higher.
Actions by another bank, namely the U.S. Federal Reserve, may be more important this week. A working group on stablecoins will get the attention of Treasury Secretary Janet Yellen when it is convened with the goal of "intra-agency work."
On spot markets, Monday began with hope for the future rather than confidence in current price events.
The weekend saw seesawing from BTC/USD, still unable to beat resistance at $32,000 or higher but likewise apt to avoid tests of $31,000 support.
At the time of writing, $31,750 formed a focus on lower timeframes, with ranging firmly the defining feature of the hourly chart.
“It's time for a green week for Bitcoin,” popular trader Michaël van de Poppe ventured.
Talk of if and when a Bitcoin price bottom could occur remains a major talking point. As Cointelegraph noted on Sunday, the drawdown from the most recent all-time high of $64,500 has now lasted for three months — the second-longest ever within a bull cycle.
With popular opinion favoring a return below $30,000, Van de Poppe argued that a bottom may not be as dramatic as expectations demand.
“A bottom usually doesn't look great, as the majority of the people are expecting further downwards movements of the markets,” he told Twitter followers.
“A bad weekly candle doesn't have to mean prices are going to fall further.”
That candle did indeed disappoint, with Sunday’s weekly close on BTC/USD being its lowest of 2021 so far.
For trader and analyst Rekt Capital, an ability to reclaim $32,000 is a problem in itself, opening up the path to levels around $29,000.
“Bitcoin is threatening to lose its Weekly support (~$32000). Today is the last day for $BTC to reclaim this support,” he warned Sunday alongside an accompanying chart.
“Lose it and there is little higher timeframe support to stop BTC from another revisit of the green area.”
In contrast to price, Bitcoin’s network fundamentals continue their march back to strength after the unprecedented events of May and June.
The network hash rate, still holding up above its local low of 83 exahashes per second (EH/s), has not seen any further major setbacks as miners relocate away from China.
The real signs of progress, however, come from difficulty.
This weekend’s automated readjustment saw difficulty dip by a modest 4.8% — a pleasing contrast from prior estimates. Two weeks beforehand, difficulty was forecast to decrease more than ever — by almost 29% — which slowly improved through the two-week difficulty cycle.
Now, Bitcoin is on track to have its first positive readjustment since before the May price crash.
The changes speak to Bitcoin’s unflinching ability to monitor itself and incentivize miners back to the network while continuing to process transactions unhindered.
As such, commentators believe that the worst of the recent upheaval is firmly in the past.
“The hangover of a difficulty adjustment downwards from the China crackdowns should conclude after this adjustment,” Kevin Zhang, vice-president of Digital Currency Group mining advisory subsidiary Foundry Services, said at the weekend.
“Expecting to see the hashrate and difficulty to slowly recover from here.”
Meanwhile, both hash rate and difficulty have dipped below their levels at the May 2020 block subsidy halving.
On-chain indicators are anything but bearish, but it’s the sustained nuanced signals, which are on the radar this week.
Specifically, funding rates across exchanges have remained neutral or lightly negative throughout the recent price volatility — a hopeful insight into traders’ mindset.
As Cointelegraph reported, large whales appear alone in being apt to sell at current levels, with other investor profiles conversely buying up the supply.
In terms of volume, however, a $30,000 Bitcoin is predictably uninteresting. Both futures and PayPal volumes have decreased significantly, the former returning to levels from late last year.
The weekend’s price action was accompanied by fluctuating bets among large-volume investors.
Short positions on Bitfinex, a driver of short-term volatility as witnessed throughout the past weeks, ebbed and flowed.
On Monday, shorts were decreasing further, as the market waited for cues over general direction.
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Bitcoin (BTC) continued to bounce off $31,000 support during Friday as fresh data reinforced the importance of current price levels.
A late surge to near $32,000 then entered as unconfirmed reports surfaced that Bank of America had given the go-ahead for Bitcoin futures trading.
Market participants held mixed opinions about the short-term outlook, with popular trader Michaël van de Poppe noting on Thursday that $31,000 was something of a final frontier for Bitcoin — lose it, and $29,000 or even $24,000 would logically be next.
Fellow trader Crypto Ed also appeared undecided on the day. Earlier in the week, he had argued that Bitcoin could stage a shock rebound and hit its range highs of $42,000 before reversing downward yet again to challenge $30,000 support.
“BTC making new lows is invalidating the idea of continuation of that bounce,” he wrote in an update. Even a comedown for the United States dollar currency index (DXY), traditionally inversely correlated with BTC, is unlikely to help bulls significantly, he added.
Update on this ⬆️— Crypto_Ed_NL (@Crypto_Ed_NL) July 16, 2021
BTC making new lows is invalidating the idea of continuation of that bounce.
I still think DXY should see a pull back but it's doubtfull that such will move BTC to 42k.
Maybe there's no hidden play in the charts and BTC is just terribly weak and I was crazy pic.twitter.com/3nr65V9y4Z
Meanwhile, new data showed considerable on-chain activity having occurred at current price levels.
According to on-chain monitoring resource Glassnode, 9.93% of the Bitcoin supply moved between $31,000 and $34,300 — a clear zone of interest for both buyers and sellers.
“This is now convincingly the largest realised volume cluster since $12k,” the firm commented.
Previously, Cointelegraph noted that $30,000 itself forms an important level in the minds of both small and large traders, whose behavior has flipped from a “sell” to a “buy” mentality in recent weeks.
A look at altcoins, meanwhile, underscored the lack of bullish sentiment across cryptocurrency markets as the week came to a close.
Most of the top 50 tokens by market capitalization saw heavier losses than BTC/USD, these reaching up to 12% amid an absence of price triggers.
Ether (ETH), the largest altcoin, was heading to a crucial support zone of its own around $1,800. The start of a new accumulation period was now “very likely,” van de Poppe said in a YouTube update on Thursday prior to volatility reentering.
Bitcoin’s rising dominance, hitting 46% on the day, added to altcoins’ woes.
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