Bitcoin has started a new week in a familiar area-the key support level is back, but the bulls have yet to break through. Will this situation change soon?
After recovering $33,000 on Friday, BTC/USD maintained the trading channel before the brief fluctuation last week.
Due to the sudden increase in short positions on the Bitfinex exchange, the price of Bitcoin fell to $32,000.
However, this effect is only temporary. Bitcoin hit a high of $34,600 on Bitstamp last weekend.
When paying attention to Bitcoin’s next move, Cointelegraph proposed five factors to consider.
As the dollar encounters classic resistance, the stock market soars
As stocks continue to rise, there seems to be little friction that could cause problems for cryptocurrency gains.
Although more and more analysts have warned that the stock market will fall in the future, sentiment in the stock market remains high this week.
Simon Ballard, chief economist at First Abu Dhabi Bank, told Bloomberg: “There seems to be a sense of complacency. People think that the blonde girl’s economy will not only perform well, but will also grow stronger.””Unfortunately, we must realize that in the future, the longer interest rates remain at current levels, the higher our expectations for balance sheet reduction, and the more intense people’s reactions may be.”
However, the US dollar may provide more clues.
Take a look at the U.S. dollar index (DXY), which measures the strength of the U.S. dollar against a basket of 20 trading partner currencies. The chart shows that some familiar resistance levels have reappeared.
Late last week, an analyst believed that DXY needs to rise from the current 92.2 to around 94 to see significant resistance that will boost Bitcoin.
However, on Monday DXY is still recovering from the weekend’s losses and is also fighting against the areas that have controlled it in the past.
As Bitcoin increasingly opens its own path in the macro environment, the reverse correlation between Bitcoin and DXY has recently been put under the microscope.
Dollar Index (DXY) 1-day candlestick chart source: TradingView
Bitcoin price “is doing everything to perform well”
From the perspective of the spot market, traders are optimistic about the prospect of Bitcoin returning to $33,000 after a short bearish last week.
After “reiterating” the level, on Sunday, trader and analyst Rekt Capital explained that BTC/USD had returned to a low point in an established range.
He said in a subsequent update: “BTC is breaking through the orange trend line,” with a chart showing the current situation.”BTC is doing some efforts to recover this trend line as a support level. Re-using the trend line as a support level will be a huge progress in challenging the breakthrough of this blue wedge structure.”
Source of BTC/USD situation as of July 12: Rekt Capital/Twitter
This trend continued on Monday, and as of this writing, Bitcoin is trading at approximately $34,350.
Trader Scott Melker added: “Bitcoin is trying to bounce back. It has closed at over 34,000 for eight consecutive weeks, and there is still a long way to go. The demand is still great.”
Last week, if the bulls managed to attack the $35,500 resistance level and continue, Bitcoin’s target price would be as high as $39,000, but it ultimately failed to materialize.
Fundamentals support their recovery
If the price trend last week was disappointing, then behind the scenes, Bitcoin has been working hard to achieve a more important turnaround.
Data from monitoring resources on Monday showed that the mining difficulty and computing power of the Bitcoin network have stabilized. Therefore, the worst period of recent mining turbulence may have ended.
After the record decline in July, mining difficulty was even expected to exceed its recent performance, and again fell by 28% or more.
However, during this period, recovery has begun to emerge. Now, if the price trend remains near the current level, the next difficulty adjustment should only fall by 10%.
Angel investor Klaus Lovgreen concluded that day: “The block has entered a rapid phase, and the next difficulty adjustment is now estimated to be -7.5%, but in my opinion, the current computing power has returned quite quickly.”
Bitcoin network mining difficulty map source: Blockchain
These changes prove the power of the Bitcoin network to balance itself without any external help-regardless of the situation, the difficulty adjustment must take into account any specific incidents.
The estimated computing power is only slightly higher than its recent low of 83 EH/s, but even so, we can see a steady and slow return to normalcy.
As reported by Cointelegraph, as Bitcoin’s mining capacity shifts from China to abroad, both of these indicators are expected to receive a new rebound. In contrast, the time frame in which this happens is anyone can guess.
Grayscale will unlock 40,000 BTC
One thing that every Bitcoin market participant is paying attention to this month is the multiple unlocks of Bitcoin by the institutional giant Grayscale.
Cointelegraph explained that the Grayscale Bitcoin Trust Fund (GBTC) will release more than 40,000 BTC in the next few weeks, which will be after a 6-month lock-up period.
People have different opinions on its market impact. Some people worry that the selling pressure will increase (until the unlocking ends, the selling pressure will actually become zero), while others believe that the spot market will be basically unaffected.
July 18th is particularly worthy of attention. The value unlocked on that day exceeds 16,000 BTC.
Statistician Willy Woo commented last week: “When GBTC shares are unlocked and sold, the GBTC premium will fall (the price of GBTC shares will fall relative to the decline in Bitcoin in the trust).””Investors are now more motivated to buy GBTC shares instead of BTC, which has transferred some buying pressure from the BTC spot market. This is bearish.”
GBTC unlock schedule source: Bybt
The bullish price indicator is close to the “launch zone”
Need some reliable “hope” in the coming week? Bitcoin market analysis data gives the answer.
On Monday, people’s attention turned to a beautiful indicator of the on-chain data service CryptoQuant, which has recorded every major price movement of Bitcoin in the past two years.
This indicator is called the “Taker Buy Sell Volume/Ratio” (Taker Buy Sell Volume/Ratio). It tracks exchange data and provides guidance on when to HODL in the local market cycle and when it is best for a profitable exit.
Now, the ratio seems to predict that BTC/USD will surge again, forming a classic “profit exit” point.
Analyst Cole Garner even emphasized what will happen if history repeats itself. However, he pointed out that the “trigger phase”-that is, when the ratio touches the upper green channel, “has not happened yet.”
He still commented: “The buy signal is coming.”
Annotated chart of Bitcoin holders’ buying and selling ratio. Source: Cole Garner/Twitter
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/grayscale-countdown-to-unlock-large-btc-5-things-to-watch-for-bitcoin-this-week/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.