5 things to see in Bitcoin this week
Bitcoin (BTC) starts a new week with average price movement and bullish fundamentals – what could the coming days bring?
Bitcoin still holds the $ 30,000 support, but there’s little to really excite traders, but the volatility has reminded them of its presence over the past week.
As mining activity continues to rebound, people are playing the “wait and see” game when it comes to the 2021 bitcoin bull market.
Cointelegraph looks at five things that could give direction to BTC price action in the short term.
Dollar sees strength as stocks calm down
It’s a classic summer picture for stocks – a slight decline over the past week, followed by near-sustained gains, with caution against Covid-19, inflation and other factors.
This time of year is notoriously actionless, however, and even the most recent changes have been minimal on a broader scale.
Lori Calvasina, head of US equity strategy at RBC Capital Markets, wrote in a note quoted by Bloomberg: “The Covid background is just one of several factors that could negatively affect trading.
The US dollar gained some strength on the modest stock shake, with the US dollar currency index (DXY) rising towards 93.
As Cointelegraph reported, the inverse correlation of DXY with Bitcoin is still palpable for some – the short-term top for the index could match the price pressures from BTC / USD.
Another focus is on oil after tensions between OPEC + members were eased and a new agreement to increase production was signed. While traditionally it has had less of an impact on Bitcoin’s behavior, any unexpected volatility could boost the low volume crypto market.
This was seen last week when reports from Bank of America revealed Bitcoin futures trading for a select number of clients quickly sending BTC / USD over $ 1,000.
Actions by another bank, namely the Federal Reserve, could be more important this week. A working group on stablecoins is called to the attention of Finance Minister Janet Yellen when it is convened with the aim of “internal work”.
Weekly candles add $ 29,000 downside risk
On the spot market, Monday begins with hope for the future rather than with confidence in current price developments.
There was a wobble in BTC / USD over the weekend, still unable to break the resistance at USD 32,000 and above, but also likely to avoid testing the USD 31,000 support.
At the time of this writing, a lower time frame bias has formed at $ 31,750, with a solid spread of the defining characteristic of the hourly chart.
“It’s time for a green week for Bitcoin,” noted trader Michaël van de Poppe risky.
Talking about if and when the Bitcoin price could bottom out is still an important topic. As Cointelegraph noted on Sunday, the decline from its recent all-time high of $ 64,500 has now lasted three months – the second longest ever in a bull cycle.
With public opinion in favor of returns below $ 30,000, Van de Poppe argues that the bottom may not be as dramatic as expected demand.
“Bottoms usually don’t look good as most people expect the market to move down,” he said told Twitter followers.
“A bad weekly candle doesn’t mean the price will keep falling.”
That candle was disappointing indeed, as the BTC / USD weekly close on Sunday was its lowest yet in 2021.
For trader and analyst Rekt Capital, the possibility of a rebound from $ 32,000 is an issue in itself, opening the way to a level of around $ 29,000.
“Bitcoin threatens to lose weekly support (~ $ 32,000). Today is the last day for $ BTC to get that support back, ”he said warning Sunday with accompanying table.
“Losing them and having less support in higher timeframes to keep BTC from taking another hit in the green zone.”
Difficulty exceeded expectations
In contrast to price, Bitcoin’s network fundamentals continue to decline sharply after unprecedented events in May and June.
The network hash rate, which has remained above the local low of 83 exahashes per second (EH / s), has not seen another major setback as miners moved from China.
The real signs of progress, however, come from trouble.
The auto-adjustment this weekend dropped the difficulty to a modest 4.8% – a pleasant contrast to previous estimates. Two weeks earlier, it was predicted that the difficulty level would drop more than ever – by almost 29% – and slowly improve over a two-week level of difficulty.
Bitcoin is now on track for its first positive correction since the price crash in May.
The changes speak to Bitcoin’s self-monitoring capabilities and give miners an incentive to get back on the network while still processing transactions unhindered.
Hence, commentators believe the worst of the recent upheaval is definitely a thing of the past.
Kevin Zhang, vice president of digital currency consultancy, Foundry Services, said, “The difficulty adjustment propensity from the raids in China should end after this adjustment. speak Weekend.
“Expect hashrate and difficulty slowly recovering from here.”
Meanwhile, both the hash rate and the difficulty in halving the block subsidies fell below their levels in May 2020.
Funding rate remains low
On-chain indicators are far from bearish, but they are nuanced sustained signals that have been shown this week.
In particular, financing rates on the stock exchanges have remained neutral or slightly negative during the recent price movement – a hopeful glimpse into traders’ thoughts.
As Cointelegraph reported, individual large whales tend to sell at current levels while other investor profiles, conversely, buy increasing supply.
In terms of volume, however, the predictable $ 30,000 Bitcoin is uninteresting. Both the futures and PayPal volumes have decreased significantly and have reached the level of the end of last year.
The notorious Bitfinex shorts “relax”
The price movement on the weekend is accompanied by fluctuations in betting for high volume investors.
Short positions in Bitfinex, a driver of the short-term volatility seen over the past few weeks, fell and flowed strongly.
What I am observing:
Shorts will be removed from July 15th.
– Dr. Jeff Ross (@VailshireCap) July 18, 2021
Short positions continued to decline on Monday as the market waited for signs of general direction.