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Bitcoin rebounds strongly off the weekly close, except for BTC miners, it’s going to be a case of “too little too late.”
Bitcoin (BTC) starts a replacement week nearing key resistance because the shock of the newest u. s. Inflation data passes — can the strength continue?
The July 17 weekly close may are practically just like the last, but BTC/USD is showing some much needed strength before the July 18 Wall Street open.
Last week was a testing time for crypto hodlers everywhere, with inflation dictating the mood across risk assets and also the U.S. dollar capping the gloomy atmosphere. With those pressures now easing — a minimum of temporarily — the mood has room to relax.
At the identical time, On-Chain Data suggests that now’s a make or break moment for Bitcoin miners, and capitulation across the market feels close.
As discuss where Bitcoin’s macro bottom could lie continues, Cointelegraph takes a glance at several factors primed to shape BTC price performance within the coming days.
All eyes on weekly moving averages
Those watching the weekly chart on BTC will have a way of reminder now around — BTC/USD finished July 17 under $100 far from where it absolutely was on July 10.
The latest weekly close are some things of a disappointment in and of itself, with Bitcoin erasing gains at the instant to print a “red” candle for the past seven days.
What happened next, on the opposite hand, had the alternative tone — a swift overnight march higher, the biggest cryptocurrency adding $1,400 in under twelve hours.
It all leads up to a well-recognized challenge on intraday timeframes — BTC/USD is approaching both $22,000 and a key trendline at $22,600 within the variety of the 200-week moving average (WMA).
Previously acting as support in bear markets, the 200 WMA has after all flipped to resistance now around, having been lost in mid-June and never reclaimed.
As such, analysts are eyeing that level as a key area of interest should bulls be ready to sustain upside pressure.
For PlanB, creator of the Stock-to-Flow family of BTC price models, an element beyond cash price is meanwhile reinforcing its importance. As in previous bear markets, the 200 WMA briefly went above Bitcoin’s realized price this year, providing a classic market reversal signal.
Realized price refers to the common price at which all the bitcoins existing last moved.
“In the securities industry of 2014/15 and 2018/19 (blue) realized price was above 200WMA and also the securities industry failed to start until realized price and 200WMA touched,” PlanB told Twitter followers on July 17 alongside an accompanying chart.
“Now realized price and 200WMA already touched at $22K. For the subsequent securities industry we want BTC above realized price and 200WMA.”
As Cointelegraph reported, bulls seem to wish to play a game of moving averages on longer timeframes, too. additionally to the 200 WMA, the 50-week and 100-week exponential moving averages (EMAs) also figure in forecasts.
The 50 EMA currently sits at $36,000 and therefore the 100 EMA at just above $34,300, data from Cointelegraph Markets Pro and TradingView shows.
Ethereum nears $1,500 in potential trendsetter move
One catalyst that would take Bitcoin over its key resistance mark at $22,600 could come from an unlikely source — altcoins.
While normally moves on Bitcoin see other cryptocurrencies before copycat moves up or down, this week, some are waiting to determine if BTC/USD will follow largest altcoin Ether (ETH) higher.
Amid news that its transition to Proof-Of-Stake (PoS) mining could soon complete, Ethereum has outperformed in terms of price gains in recent days, and is up 25% over the past week alone.
At the time of writing, ETH/USD was close to challenge $1,500 for the primary time since June 12.
“$eth reclaimed its 200 week moving average in the week, btc will probably next week, the time to be bearish has defo to an end imo,” popular Twitter account Bluntz summarized on the day.
Fellow commentator Light likewise considered that Ethereum’s strength should keep upward pressure on Bitcoin, noting liquidations among those traders ignoring the ETH moves and continuing to be short BTC.
shorts had days to get out on BTC. 0 reason to be short it when ETH did what it did.
A large asset in the ecosystem ripping 40% stokes risk seeking behavior everywhere else. It makes people consider that assets can in fact go up in price. It leads to catch-up/rotational flows. https://t.co/nae0WIys9M
— light (@lightcrypto) July 18, 2022
Cross-crypto short liquidations within the 24 hours into July 18 totaled around $132 million, data from on-chain monitoring resource Coinglass confirms.
Going forward, however, not everyone seems to be convinced that Ethereum are ready to break its overall downtrend, with the implications obvious for other tokens as a result.
Cointelegraph contributor Michaël van de Poppe argued that the pull of the weekend CME futures gap on Bitcoin could provide a downside force to puncture the optimism.
CME futures finished their previous trading day, July 15, at around $21,200.
“With the potential of a CME gap beneath us (and Bitcoin swimming round the previous CME gap), I won’t be surprised with a fake-out move and retest lower for $ETH,” he wrote in an update.
“Looking to urge into longs round the $1,250-1,280 region.”
Dollar strength finally flips in Bitcoin’s favor
On the subject of macro movements, the landscape looks overall less frenetic than that which greeted crypto investors last week.
Inflation data has come and gone, and therefore the debate over whether inflation has or has not peaked within the U.S. thus cools until the subsequent Consumer price level (CPI) print in August.
The Federal Reserve System will settle on a way to tackle inflation as regards key rate of interest hikes later this month, the Federal Open Markets Committee (FOMC) nonetheless set to satisfy only on July 26.
Any macro cues when it involves BTC price action will thus be coming from other areas, with geopolitical triggers high on the list of potential factors.
Asian markets were stronger because the week began due to a modest recovery in Chinese tech stocks previously hammered by Coronavirus nerves.
At the identical time, the U.S. dollar, the star of recent weeks as equities worldwide felt pressure, began to consolidate its gains.
The U.S. dollar index (DXY), strength during which has long been inversely correlated with cryptoasset performance, headed south under 108 on the day, having reached fresh two-decade highs the previous week.
“Finally seeing a drop on the daily,” Twitter analyst IncomeSharks commented, highlighting the potential for DXY to check a trendline from May.
“Even a drop to the present line would be big for Stocks and Crypto. Would line up perfectly with a bullish week before the FED meeting.”
Fellow account Rickus also felt that Bitcoin wouldn’t “break down again” despite a pullback still being possible — because of the DXY comedown and a stronger finish for the S&P 500.
SPX had a good close before the weekend, DXY also looks a bit weak on ltf while BTC is close to resistance levels..Lines I am watching..I personally don't think we break down again although I am looking for a pullback. pic.twitter.com/KcYRJFrrbS
— Rickus (@rickus_trades) July 17, 2022
“Should give room in the week for equities & crypto to bounce until it find near support,” 0xWyckoff, creator of crypto trading resource Rekt Academy, added partly of a thread about the DXY.
In a separate observation meanwhile, Dan Tapiero, managing partner and CEO at 10T Holdings, noted that a macro USD high versus the Chinese yuan should mark a turnaround point for BTC.
“Last 3 major BTC highs in 2014, 2018, 2021 roughly coincided with highs in Chinese RMB/lows in USD,” he noted partly of a tweet on July 18.
“Suggests that Dollar peak soon would be supportive of BTC low.”
Miners dump 14,000 BTC in days
With such a lot hope that a trend turnaround may be on the cards, on-chain data showing Bitcoin miners selling inventory looks all the more bleak.
According to data from on-chain analytics platform CryptoQuant, beginning July 14, miners removed a major chunk of BTC from their reserves.
The effect was that miner reserves fell to their lowest levels since July 2021, some extent which also marked a BTC price low.
Reserves stood at 1.84 million BTC on July 18, down 14,000 BTC versus the July 14 tally.
For CryptoQuant contributor Edris, the numbers were an encouraging sign, hinting that miners were now contributing to establishing a macro BTC base.
“Bitcoin miners are finally capitulating,” he summarized over the weekend.
“BTC price has been consolidating at the $20K level for the past few weeks, making investors wonder if an accumulation or distribution phase goes on. watching the Miners’ Reserve chart, it looks like the latter is that the case.”
Macro analyst Alex Krueger meanwhile described June’s miner sales as a “clear sign of capitulation,” adding that miners “tend to accumulate on the high then puke when things go bad.”
RSI sparks “very rare” BTC price inflection point
Finally, a “rare” event on the Bitcoin chart could have provided the fuel for a historic turnaround, analysis suggests.
Taking the BTC/USD chart from the start of Bitcoin’s lifespan, Stockmoney Lizards noted that Bitcoin’s Relative Strength Index (RSI) is now at suitably low levels and has combined with slightly of a log chart trendline which sparked the best BTC price recoveries.
“Current exciting and extremely rare situation now,” it announced at the weekend.
“RSI below 45 and logaritmic bottom showed a good reversal within the past, followed by a crazy pitched battle. Cross = RSI<45 + log. Bottom.”
An accompanying chart showed the facility of such an incident, which follows RSI hitting its lowest levels on record.
For CoinPicks analyst Johnny Szerdi, meanwhile, Bitcoin needed to interrupt the 50 mark on RSI, a key resistance zone in recent months, to avoid the danger of a fresh sell-off.
GM! #Bitcoin is at a critical point. It hasn't been able to break 50 RSI since 3/14. It rejected from it 5 times since 4/20. Notice the vertical lines to where it matches up with the big sell offs. With 🔻 volume, if we reject here for a 6th time, it could mean another sell off. pic.twitter.com/znZNpfJ3K8
— Johnny Szerdi (@johnnyszerdi) July 17, 2022
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