BTC traders prepare for $30K loss – 5 Bitcoin highlights this week.
BTC traders prepare for $30K loss - 5 Bitcoin highlights this week.
The Blockchain Industry: A Multimonth Trading Range and Potential BTC Price Triggers
The blockchain industry is currently experiencing a period of stagnation, with Bitcoin (BTC) trading within a multimonth range without any significant shifts in price dynamics. Traders are growing frustrated as they search for catalysts that could potentially change the trend. Despite various attempts, such as macroeconomic data releases and institutional involvement, the market remains indecisive, constantly oscillating between upside and downside liquidity pockets.
This lack of a clear trend is evident on low timeframes, where Bitcoin fails to establish a sustained direction. The largest cryptocurrency has been trapped in this state for weeks, leaving traders wondering when the bulls or bears will eventually prevail. Consequently, the upcoming week offers little in terms of data-driven risk asset catalysts from the United States or the Federal Reserve. However, on-chain data suggests a possible re-accumulation phase among Bitcoin investors, indicating a “calm before the storm” scenario.
Bitcoin Weekly Close: Volatility Remains at Bay
The recent weekly candle close of Bitcoin displayed a refreshing absence of volatility. Despite the usual erratic price movements during this timeframe, BTC/USD remained relatively stable, with the $30,000 support level remaining unchallenged. This has contributed to the continuation of a narrow “mini range” that has been in place since the previous week. Traders have become familiar with this range, with popular traders like Daan Crypto Trades emphasizing that bulls must retake $30.5K to shift the inefficiency from the recent dump.
Other traders, such as Credible Crypto and Crypto Tony, suggest that Bitcoin may experience further downside in the near future, considering the prolonged inability of bulls to break out of the current range. Support levels at $27,400 and $28,300 have been identified as potential targets. Additionally, an ongoing battle on Bitcoin’s relative strength index (RSI) indicates a fierce struggle between bulls and bears, with the outcome still uncertain.
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Earnings Season and U.S. Data Releases
For those hoping for a macro-inspired shake-up in risk assets, the coming week may be disappointing. The United States has a lack of significant data releases, with the highlight being tech firm earnings and jobless claims on July 20. However, with the Federal Reserve’s decision on interest rate hikes still two weeks away, volatility remains on the horizon. The Kobeissi Letter, a financial commentary resource, acknowledges that it will be a busy couple of weeks due to earnings season and the upcoming Fed meeting.
Market expectations, as reflected in CME Group’s FedWatch Tool, suggest that the Fed will resume rate hikes despite positive data prints showing a retreat in inflation. The odds of a 0.25% rate hike currently stand at a staggering 96.1%. Another index to watch is the U.S. Dollar Index (DXY), which is attempting to reclaim the 100 mark after dropping below it for the first time in over a year. Although Bitcoin has traditionally exhibited an inverse correlation with DXY, this relationship has diminished in 2023.
Whales Return to the Game
On-chain data indicates an exciting development in the behavior of Bitcoin whales. CryptoQuant, an on-chain analytics platform, has observed an increase in unspent transaction outputs (UTXOs) reflecting large amounts of coins. This resurgence of whales mirrors the pattern seen during previous bull markets. As the price of Bitcoin gradually rises, the whale group expands, which can be seen as a positive signal for long-term market growth.
The rebounding numbers of whales and larger investor cohort exposure at current prices have been previously reported. This trend suggests increasing confidence in Bitcoin’s price trajectory.
Supply Dynamics and Early Bull Market Signals
The movement of Bitcoin’s supply near the $30,000 price point is another significant development. On-chain analytics platform Look Into Bitcoin reveals that a substantial portion (3.8%) of the total supply has moved within the $30,200 zone. This indicates a critical area of interest among investors. Additionally, older, long-dormant supply is re-emerging, a pattern characteristic of early stages in previous Bitcoin bull markets. Such supply dynamics, along with increased on-chain spending volume, provide insights into the current market cycle.
“Greed” Fades from Crypto Markets
The Crypto Fear & Greed Index, a sentiment yardstick for the crypto market, reflects the ever-changing mood among market participants. While currently in neutral territory, the index is at its lowest point for July, with a reading of 54/100. Extreme levels of fear or greed often signal potential market rebounds or retracements. Therefore, this fading greed sentiment suggests a cautious environment around the crucial $30,000 boundary.
In conclusion, the blockchain industry is currently experiencing a period of consolidation, with Bitcoin’s price trapped within a multimonth trading range. Traders are eagerly searching for catalysts that could potentially change the trend and unlock new market movements. While upcoming data releases from the United States may not offer significant risk asset triggers, on-chain data suggests a re-accumulation phase among Bitcoin investors. The return of whales, supply dynamics, and sentiment indicators all provide valuable insights into the potential future direction of the market. As the industry continues to evolve, it is crucial to closely monitor these factors to gain a comprehensive understanding of the blockchain industry’s dynamics.
