5 things to know in Bitcoin this week

Bitcoin’s price continues to hover above $30,000, showing little movement and frustrating traders who are eager to see a change in the market trend.

At lower timeframes, Bitcoin lacks a clear trend, as it has been fluctuating between upside and downside liquidity pockets without a decisive move in either direction.

This repetitive struggle has become a regular occurrence, and despite various factors such as macroeconomic data prints and institutional involvement, the market remains stagnant.

Interestingly, the lack of data-driven risk asset catalysts from the United States or the Federal Reserve in the coming week may not be a significant concern. On-chain data for Bitcoin suggests a re-accumulation phase among investors, indicating a “calm before the storm” scenario before a significant market shift.

The Crypto Fear & Greed Index, which measures market sentiment, currently reflects a “neutral” sentiment, reaching its lowest point for July so far.

Taking these factors into account, CryptoGrafos examines potential triggers that could impact Bitcoin’s price in the upcoming days.

Bitcoin Weekly Close Shows Stability, Minimizing Volatility

Bitcoin’s weekly candle close, based on TradingView data, surprisingly demonstrated stability without the usual volatility. Even the support level at $30,000 remained unchallenged.

As a result, BTC/USD continues to trade within a narrow range that has been in place since last week. This range was established after a false breakout led to new yearly highs followed by a sharp decline.

Popular trader Daan Crypto Trades summarized the situation, stating that the range has become evident to everyone. For him, a bullish scenario would require Bitcoin to reclaim $30.5K and close the inefficiency caused by the recent dump. Until that happens, his base case is for the price to seek liquidity at $29.5K.

Other traders share a similar view, suggesting that Bitcoin may test new local lows due to the bulls’ inability to break the range for an extended period. Credible Crypto, for instance, believes that Bitcoin could return to the $27,400 level, which hasn’t been seen in almost a month. Trader Crypto Tony suggests a downside target area around $28,300, maintaining a bearish bias.

Traders are closely monitoring Bitcoin’s relative strength index (RSI), which recently displayed a bearish divergence with the price trajectory. According to trader Jelle, Bitcoin attempted to overcome this divergence but was quickly rejected. Both bulls and bears are fiercely defending their ground, leading to further consolidation until a breakout occurs.

Earnings Season and U.S. Data Releases

Expectations for a significant market shake-up due to macroeconomic data releases from the United States may go unfulfilled this week. The highlight will be the earnings reports of tech firms and jobless claims on July 20. However, with the Federal Reserve’s decision on interest rate hikes still about two weeks away, volatility remains on the horizon.

Financial commentary resource The Kobeissi Letter stated that it will be a busy couple of weeks with earnings season in full swing and the July Fed meeting in focus.

According to current estimates from CME Group’s FedWatch Tool, market sentiment remains convinced that the Fed will resume rate hikes, despite positive data prints indicating a retreat in inflation faster than expected. The odds of a 0.25% hike stand at an overwhelming 96.1%.

Another index worth monitoring is the U.S. Dollar Index (DXY), which is attempting to reclaim the 100 mark after falling below it for the first time in over a year. Bitcoin previously showed a strong inverse correlation with DXY, although this relationship has diminished significantly in 2023.

Whales Reemerge in the Bitcoin Market

On-chain data reveals the return of Bitcoin whales, creating excitement among analysts at CryptoQuant, an on-chain analytics platform.

SignalQuant, a contributing analyst, highlighted the increase in unspent transaction outputs (UTXOs) reflecting large amounts of coins. This pattern resembles the behavior seen during classic bull markets.

SignalQuant referred to the UTXO Value Bands metric, which shows that whales are gradually becoming active again in 2023 after a significant decrease in the latter half of 2022.

This observation leads to the belief that if the whale indicators continue to rise, it would suggest a long-term bottom was reached at the end of 2022 and that Bitcoin’s price will continue to rise.

Previous reports by CryptoGrafos also mentioned the resurgence of whale numbers and increased exposure of larger investor cohorts at current prices.

Supply Dynamics Point to Bullish Signals

Hidden bullish signals in Bitcoin’s price are not only linked to whale behavior but also to supply dynamics, according to on-chain analysts.

Recent on-chain data reveals that a significant portion of the BTC supply has moved near the $30,000 level, indicating a critical point of interest for investors.

Look Into Bitcoin, an on-chain analytics platform, reports that approximately 3.8% of the total supply has moved within the range around $30,200.

Furthermore, dormant supply that has been inactive for an extended period is becoming active again. According to Philip Swift, the creator of Look Into Bitcoin, this reactivation of dormant supply has been observed during the early stages of every Bitcoin bull market.

The “Greed” Factor Fades in Crypto Markets

The Crypto Fear & Greed Index, a sentiment indicator capturing market participants’ rapidly changing mood, demonstrates the fickleness of the average crypto investor.

Around the crucial $30,000 boundary, sentiment improves significantly above and deteriorates below this level.

Currently, the index is in neutral territory but at its lowest point for July, measuring 54/100.

Extreme fear or greed often serves as an advance warning of market rebounds or retracements, respectively.

For more news, find me on Twitter or subscribe to my YouTube channel.

What is your opinion on this issue? Leave me your comment below! I’m always interested in your opinion!

Leave a Reply

Your email address will not be published. Required fields are marked *

Recommended for you