Bitcoin started a new week on familiar territory after a solid 2-day bullish weekend.
With the rally that brought the price close to $ 36,000, the largest cryptocurrency is showing signs of strengthening, but old resistance levels remain intact.
The current situation is complicated: miners are moving elsewhere and the associated price campaign has made many people suspicious; At the same time, the most accurate forecasters are testing Bitcoin.
However, after the fundamentals finally showed signs of life, the bulls celebrated.
The article this week looks at 5 factors when it comes to BTC / USD.
The big markets have been on a strange but bullish mood this week as the S&P 500 made new all-time highs for seven days in a row.
Encouraging economic data from the US and intervention by the Federal Reserve have pushed stock indices higher than ever in the past few weeks.
Chris Iggo, Head of Core Investments at AXA Investment Managers based in the Netherlands, Summary:
“The market is priced to continue the structured scenario, couldn’t be better.”
An interesting twist is that oil, now the heart of OPEC + production, is on its own but has raised concerns about how much fuel will be available in August.
With the US dollar stable, it looks like the equity story is a potential driver for the future. This scenario traditionally helps Bitcoin price action move up.
S&P 500 1-Day Candlestick Chart | Source: TradingView
Bitcoin probably experienced its greatest difficulty ever last weekend, but even that may not be enough to stabilize the situation.
At 27.94%, the difficulty level surpassed any previous drop on Saturday, reflecting the heavy impact of the move in China on mining on the Bitcoin network.
According to data from the resource monitoring source BTC.com, the next adjustment may fall even further.
Because difficulty adjustments can only be estimated before they actually happen, and so many changes happen during each two-week difficulty interval, it is difficult to say how much the statistics need to be reduced to reflect the real state of the network.
With the recent decline, mining is much more economically attractive for many current and future participants. As a result, more miners are likely to start working in the next 13 days, increasing the hashrate and thus reducing the need to further reduce the difficulty.
Activity review hashrate in the past few days shows that the value has recovered after the decline, as evidenced by the hashrate, which rose from up to 83 EH / s last week to over 90 exahashes per second (EH / s).
However, at the time of writing, Bitcoin is well on its way to losing another 28.68% in trouble.
Bitcoin mining difficulty | Source: dilution-safe
“After a record correction of -27.9%, the difficulty level of Bitcoin is now at the level after it was halved last year. However, the price is + 263% higher. This shows how profitable Bitcoin mining is for efficient miners ”, according to the popular Twitter account Dilution-proof Note on Sunday together with the above difficulty table.
Bitcoin 7 Day Average Difficulty Chart | Source: Blockchain
Once the difficulty subsides, the Bitcoin price action increases welcome and climbs back to the top of the trading range.
For the remainder of the weekend, BTC / USD saw little resistance and bounced around 5% before the retracement.
BTC / USD 1-Hour Candlestick Chart | Source: TradingView
What could further limit the price? For renowned analyst Rekt Capital, two well-known moving averages (MAs) could be the bears’ best friends in the coming days.
As reported, BTC / USD set up a “death cross” last month. A death cross occurs when the 50-day MA crosses below the 200-day MA, an event traditionally viewed as a bearish signal.
In fact, Death Crosses don’t always lead to price drops, but their notoriety hasn’t improved this year.
The current price strength will be tested when Bitcoin hits the MA, which is currently hovering above the spot price.
“As soon as BTC can break through $ 36,000 … The next big resistance will be the ~ $ 38,000 area,” Rekt Capital to explain On Sunday.
“Not only the top of the macro-consolidation range that Bitcoin is currently working on … but there is also a death cross of the 2 EMAs (50 blue & 200 black) that could act as a confluence resistance there.”
BTC / USD chart and “death cross” | Source: Rekt Capital
Meanwhile, Trader Crypto Ed warning today that the foundation established last weekend is lost again.
“Totally down,” he said, adding that the market needs to “retest” at lower levels to encourage a truly resurgent bull run.
BTC / USD corrected from a high of $ 35,900 and rose to $ 34,000, a level that is still being held at press time.
The weekend rally is questionable for those who pay attention to the classic market characteristic – volume.
Despite the rapid rise in prices, the funding volume is still low. As a result, the reliability and self-sustainability of price action was called into question from the start.
On Monday, on-chain monitoring service CryptoQuant noted that volume is still falling, suggesting a lack of interest from key potential buyers.
“Both inflows and outflows dry up depending on the market volume. It looks like the whales are at low levels and there isn’t much movement, ”the company said in a statement post on the blog.
“Players who drift to the sides of the market are very likely to trigger a relatively large price reaction.”
Bitcoin volume data chart | Source: CryptoQuant
On Saturday, however, statistician Willy Woo recording The number of Bitcoin units holding large amounts of BTC rose instantly – a classic signal that whales are interested. This is done before the difficulty adjustment.
Other investors are also joining the scarce supply of Bitcoin, especially the “Rick Astley” type, also known as last resort hodler.
“Astley says” shorter will fail, “Woo comment.
How pessimistic is the average Bitcoin market participant?
This question is usually answered by the Fear and Greed Index, and if you believe this week’s results, it may not be that bad.
Today the fear and greed index reached its highest level in almost three weeks: 29/100. The last time this happened, BTC / USD was on its way to a June high of over USD 41,000.
The Fear and Greed Index uses a variety of factors to provide sentiment estimates for the cryptocurrency market, thus helping to determine when an asset is overbought or oversold at a given price. .
Its bullish spikes typically hit 95/100 or so, which leaves plenty of room for Bitcoin to grow before “extreme greed” kicks in and causes a catastrophic slump.
The index hit a low of 10/100 – “extreme fear” – on June 22nd before recovering.
1-month chart of the fear and greed index | Source: alternative.me
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