BTC Markets

Bitcoin price corrects after hitting a wall at a multi-month descending trendline

“Up only” Bitcoin and Ethereum take a breather after encountering resistance at a stiff multi-month descending trendline.

On Aug. 15, Bitcoin (BTC) price and the wider market corrected while the S&P 500 and DOW looked to build on four-straight weeks of robust gains. Data from TradingView and CNBC show the Dow pushing through its 200-day moving average, a first since April 21 and perhaps a sign for bulls that the market has bottomed. 

Dow Jones Industrial Average Index (DJI). Source: TradingView

While equities markets have been strikingly bullish in the face of high inflation and a steady schedule of interest rate hikes, a number of traders fear that the current 32-day uptrend in the DOW and S&P 500 could be a bear market rally.

This week’s (Aug. 17) release of minutes from the Federal Open Markets Committee (FOMC) should give more context to the Federal Reserve’s current view of the health of the United States economy and perhaps shed light on the size of the next interest rate hike.

For the past month, overly bullish crypto traders on Twitter have also been touting a narrative that emphasizes Bitcoin, Ether (ETH) and altcoins selling off prior to FOMC meetings and then rallying afterward if the set rate aligns with investors’ projected figure.

Somehow, this short-term dynamic also contributes to investors’ belief that the Fed will “pivot” away from its monetary policy of interest hikes and quantitative tightening after “inflation peaks.” This may be a somewhat profitable trade for savvy day-traders, but it’s important to note that inflation is currently at 8.5% and the Fed’s target is 2%, which is quite aways to go.

Ultimately, Bitcoin price maintains a high correlation to the S&P 500 so investors would be wise to avoid tunnel vision-like narratives that align with their bias and keep an eye on the performance of equities markets.

Bitcoin sells-off at a multi-month trendline resistance

Over the weekend, Bitcoin made a strong move at a multi-month descending trendline and broke through the $24,000 level, following a path that many traders anticipated would trigger an upside move and the VPVR gap fill to the $28,000 to $29,000 level.

Trader Cheds said “BTC really looked like it was going to go last night” but the selling at resistance created an “outside bar” where “the prior trend was challenged” and according to Cheds, this is a sign that “the trend may be stalling and be on the look out for signs of further weakening.”

Pseudonymous trader “Big Smokey” appeared to concur that a “strong directional move” could be on the cards, citing tightening in the Bollinger Bands and separately in the Super Guppy indicators as Bitcoin price drew close to the multi-month descending trendline.

In a separate chart, Big Smokey suggested that if the descending trendline is broken, Bitcoin could see “a 26% pop to $28K before more sideways chop,” resulting in an eventual retest of the $24,000 level.

After hitting similar overhead resistance levels, most altcoins also followed Bitcoin’s lead by posting single-digit losses, but those that were flashing bottoming signals are still rounding out with what appear to be reversal patterns.

AVAX, FTM and SOL daily chart. Source: TradingView

Related: Shiba Inu eyes 50% rally as SHIB price enters ‘cup-and-handle’ breakout mode

Every dog has its day

Interestingly, on Sunday (Aug. 14) popular traders on Crypto Twitter prophesied that the sharp gains from meme tokens like Shiba Inu (SHIB) and Dogecoin (DOGE) were a clear sign that the bull phase was over-extended and en route to a correction.

Ultimately, after a 130% and 42.5% rally from Ether and BTC, each was poised for a bit of profit taking, especially at resistance. Open Interest on both assets remains near all-time highs, but what it will take to trigger BTC to breakout or breakdown at the multi-month descending trendline is unknown.

Perhaps a 1% rate hike, stiffer crypto regulations or a surprise turn-around in equities markets could send price tumbling back toward yearly lows. Alternatively, a successful Ethereum Merge could be a positive catalyst that triggers a high volume surge above Bitcoin’s key resistance level.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Will the Bitcoin mining industry collapse? Analysts explain why crisis is really opportunity

Many BTC miners are in a tough spot and a few could collapse, but experts say the industry is here to stay.

Bitcoin mining involves a delicate balance between multiple moving parts. Miners already have to face capital and operational costs, unexpected repairs, product shipping delays and unexpected regulation that can vary from country to country — and in the case of the United States, from state to state. On top of that, they also had to contend with Bitcoin’s (BTC) precipitous drop from $69,000 to $17,600. 

Despite the BTC price being 65% down from its all-time high, the general consensus among miners is to keep calm and carry on by just stacking sats, but that doesn’t mean the market has reached a bottom just yet.

In an exclusive Bitcoin miners panel hosted by Cointelegraph, Luxor CEO Nick Hansen said, “There’s going to definitely be a capital crunch in publicly listed companies or at least not even just publicly listed companies. There’s probably close to $4 billion worth of new ASICs that need to be paid for as they come out, and that capital is no longer available.”

Hansen elaborated with:

“Hedge funds blow up very quickly. I think miners are going to take 3 to 6 months to blow up. So we’ll see who’s got good operations and who’s able to survive this low margin environment.”

When asked about future challenges and expectations for the Bitcoin mining industry, PRTI Inc. adviser Magdalena Gronowska said, “One of the biggest challenges that we’ve had in this transition to a low-carbon economy and reducing GHG emissions has been an underinvestment in technology and infrastructure by the public and private sectors. What I think is really amazing about Bitcoin mining is that it’s really presenting a completely novel way to fund or subsidize that development of energy or waste management infrastructure. And that’s a way that’s beyond those traditional taxpayer or electricity ratepayer pathways because this way is based on a purely elegant system of economic incentives.”

Will Bitcoin destroy the environment?

As the panel discussion shifted to the environmental impact of BTC mining and the widely held assumption that Bitcoin’s energy consumption is a threat to the planet, Blockware Solutions analyst Joe Burnett said:

“I think Bitcoin mining is just not bad for the environment, period, I think if anything, it incentivizes more energy production, it improves grid reliability, and resilience and I think it will likely lower retail electricity rates in the long term.”

According to Burnett, “Bitcoin mining is a bounty to produce cheap energy, and this is good for all of humanity.”

Related: Texas a Bitcoin ‘hot spot’ even as heat waves affect crypto miners

Will industrial Bitcoin mining catalyze the long-awaited “mass adoption” of crypto?

Regarding Bitcoin mining dominance, the future of the industry and whether or not the growth of industrial mining could eventually lead to crypto mass adoption, Hashworks CEO Todd Esse said, “I believe that most of the mining down the road will be held in the Middle East and North America, and to some extent Asia. Depending upon how much they are eventually able to cut off. And that really speaks to the availability of natural resources and the cost of power.”

While it is easy to assume that growing synergy between big energy companies and Bitcoin mining would add validity to BTC as an investment asset and possibly facilitate its mass adoption, Hansen disagreed.

Hansen said:

“No, certainly not, but it is going to be the thing that transforms everyone’s life whether they know it or not. By being that buyer of last resort and buyer of first resort for energy. It’s going to transform energy, energy markets and the way it is produced and consumed here in the United States. And, overall, it should significantly improve the human condition over time.

Don’t miss the full interview on our YouTube channel and don’t forget to subscribe!

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Bitcoin price falls under $21K, bringing more capitulation or just consolidation?

Multiple indicators and on-chain metrics reflect confluence pointing to an improving market, but technical analysis still raises the possibility of Bitcoin dropping to new yearly lows.

On July 26, Bitcoin (BTC) price dropped below $21,000, giving back the majority of the gains accrued in the previous week and returning to the $23,300 to $18,500 range that Glassnode analysts describe as “the Week 30 high and Week 30 low.” 

A handful of analysts and traders attribute the July 26 to July 27 Federal Open Market Committee (FOMC) meeting and the expected Federal Reserve rate hike as the primary reasons for the current sell-off.

Barring the announcement that the United States economy has entered a recession, a few traders believe that the expected 75 to 100 basis point (BPS) hike will be followed by a relief rally that could see BTC, Ether (ETH) and other large-cap altcoins snap back to the top of their current range. Of course, this sentiment reflects more speculation than sound analysis, so take it with a grain of salt.

Bitcoin week 30 price range. Source: Glassnode

Given that the BTC price is simply continuing to trade in the same range that it has been in for the past 42 days, the real question is whether the market will bring more consolidation or another round of capitulation.

In its July 26 on-chain newsletter, Glassnode analysts posit that investors can find their “conviction through confluence” of multiple technical and on-chain metrics, which suggest the peak of capitulation has long passed.

According to the analysts, rapid deleveraging threw many metrics into “extreme statistical deviations” and with the worst of the selling possibly behind us, Bitcoin price returning to the high $20,000 zone was expected.

Glassnode notes that:

“The June leg down in price action has produced the lowest 4-yr rolling Z-Score value on record.”

And the analysts explained that the 4-year rolling MVRV Z-score “signaled undervaluation for all bear cycle bottoms, including 2015, 2018, and the March 2020 flash crash.”

Bitcoin MVRV Z-Score 4 year Rolling chart. Source: Glassnode

When compared against various cohorts of long and short-term sellers and metrics like Realised Price, Mayer Multiple and longer-term daily and weekly moving averages, Glassnode suggests that confluence in the indicators and historical data point to growing bullish momentum.

On-chain data spots a bottom, but what does technical analysis say?

From the perspective of technical analysis, Bitcoin’s move to $24,200 presented a brief breakout from the current range, but the inability to sustain momentum at this level presented the necessary alternative of a lower support retest at the range midline near the 20-day moving average of $21,500.

According to independent market analyst Michaël van de Poppe, $21,600 was the area for BTC to hold. Below this, the asset’s price action is dependent upon commentary from this week’s FOMC comments.

CryptoISO expressed a similar sentiment regarding the correlation of equities to Bitcoin and the importance of the $21,500 zone for BTC price.

Fractal lovers will note that the price action within the current range is eerily similar to the May 8 through July 12 range-bound trading and following breakdown that took place on July 12, but analysts would quickly point out that back-to-back calamities like Voyager, Celsius and 3AC blowing up played a significant role in that sell-off, whereas now there appear to be no discernible black swan events on the horizon.

BTC/USDT daily chart. Source: Tradingview

Regardless, both reflect periods of 34 to 42 days of sideways trading, and on many occasions, veteran trader Peter Brandt has identified the current market structure as a “bearish rectangle” technical analysis pattern.

Bearish rectangle breakdown. Source: MoneyControl.com

In the event that the pattern breaks to the downside from the current range, this would place the price in the $14,500 to $13,000 zone some traders have been lusting for.

BTC/USDT daily chart. Source: Tradingview

Ultimately, last week’s range breakout to $24,200 on July 20 pierced the upper band of the Bollinger Bands momentum indicator and now that price is below the midline, there is an increased chance that BTC could trade down to the lower band which conveniently resides at the bottom of the current range of $24,200 to $18,600.

Trading within range is not much to worry about until a breakout or breakdown catalyst emerges. Perhaps July 27’s earnings from big tech companies, the state of the market at the opening bell and comments from the FOMC will determine the direction Bitcoin decides to take. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin price dips under $23K after earnings report reveals Tesla sold 75% of its BTC

BTC’s march up toward $24,000 took a brief pause after media headlines announced that Tesla had sold 75% of its Bitcoin position.

“Easy come, easy go” was the story on July 20. The day started on a positive note with Bitcoin (BTC) climbing above $24,300, only to end the official trading day in the red after less than stellar Q2 earning news showed Tesla sold 75% of its Bitcoin and Minecraft creator Mojang Studios reversed course by deciding to ban NFTs on its platform.

Daily cryptocurrency market performance. Source: Coin360

A potential source of the afternoon downturn can be traced to Tesla’s Q2 earnings data, which showed that the electric car company sold off 75% of its Bitcoin holdings in order to add $963 million in cash to its balance sheet.

Shortly after the Tesla news broke, Bitcoin price pulled back from its daily high of $24,280 to $22,900, before stabilizing around $23,500.

Related: Bitcoin price hits $24K, but analysts say on-chain data points to an ‘inevitable’ pullback

Traders bullish estimates may have been premature

Today’s unexpected pullback may have also helped to bring a little market perspective to crypto traders who were ready to call for an end to the bear market.

While the pullback for Bitcoin has thus far been relatively mild, multiple altcoins experienced steeper declines as recent price runups created a nice opportunity for traders to book some gains.

The Ethereum layer-two solution Polygon saw an 11.5% decrease following a week in which the token value increased by 87%. Arweave (AR) saw its token price tumble by 10.84% and Filecoin (FIL) experienced a pullback of 10.2%.

On the flip side, the only tokens in the top 100 that have managed hold onto positive gains for the day are Steem (STEEM) and Reef (REEF), which recorded slight gains of 6.27% and 3.15%, respectively.

The overall cryptocurrency market cap now stands at $1.035 trillion, and Bitcoin’s dominance rate is 42.7%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin price hits $24K, but analysts say on-chain data points to an ‘inevitable’ pullback

The crypto market rally continues, but analysts are on the fence about whether BTC and ETH will slip back into range or push closer to higher-timeframe resistance levels.

Cryptocurrency investors continue to enjoy this week’s bullish price action after Bitcoin (BTC), Ether (ETH) and a handful of altcoins rallied on July 20 alongside gains in the traditional markets. 

Data from Cointelegraph Markets Pro and TradingView shows that a midday rally by Bitcoin bulls managed to lift the top crypto to a daily high of $24,281, which sparked a new round of bullish proclamations on Crypto Twitter.

BTC/USDT 1-day chart. Source: TradingView

While the week-long climb has helped boost investor sentiment, several analysts are warning traders to not get too far ahead of themselves because the market is still providing some red flags worth taking note of.

Prepare for an inevitable pullback

Bitcoin’s climb above $24,000 officially confirmed a breakout from the previous trading range between $18,000 and $22,500, according to market analyst Caleb Franzen, who posted the following chart noting the question the market now faces. 

BTC/USD 1-day chart. Source: Twitter

Franzen said,

“Regardless, my belief is that the next pullback will be a major test within this bear market. Will buyers step in aggressively on a pullback or capitulate?

Whale wallets remain dormant

One reason to be wary of the current rally’s ability to sustain itself is the lack of whale wallet activity, according to on-chain research firm Jarvis Labs.

Bitcoin divergence chart. Source: Jarvis Labs

The red and orange dots on the BTC divergence chart above represent buying activity by large and small whale wallets at different points in time. As shown in the red highlighted box, activity from whales has been almost non-existent over the past few months as Bitcoin trended down.

Data from Jarvis Labs also showed that larger entities have yet to return to active buying, and the chart below shows the change in BTC whale holdings.

BTC whale holding change. Source: Jarvis Labs

Jarvis Labs said,

“We want to see this pattern of colored dots begin moving up and to the right. If we get it, then that’ll be a positive sign that any rally could have significant momentum behind it.”

Based on the trends identified, Jarvis Labs stated that “it is hard to get too excited about a rally extending beyond the liquidity that sits around $28,000,” and instead suggested that “For now, the lower band at $25K seems most likely.”

Related: Bitcoin may hit $120K in 2023, says trader as BTC price gains 25% in a week

The high time frame trend remains bearish

The turnaround in sentiment over the past week was acknowledged by market analyst and swing trader il Capo of Crypto, who noted that the “Low timeframe trend is bullish, no doubt about it.”

But before jumping all in on this rally, il Capo of Crypto also posted the following chart warning that the “high timeframe trend is still bearish and this is another lower high.”

BTC/USD 12-hour chart. Source: Twitter

Il Capo of Crypto said,

“Ltf [low time frame] bearish confirmation is below $22K. Main target remains $15.8K-$16.2K.”

The overall cryptocurrency market cap now stands at $1.062 trillion and Bitcoin’s dominance rate is 42.7%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin price holds $23.5K, leading bulls to say ‘it’s different this time’

Traders expect BTC price to venture into the $27,000 to $32,000 range now that Bitcoin looks to secure a daily close above its current range.

Similar to Stockholm syndrome, where captives develop a psychological bond with their captors, crypto winters have a way of flipping even the most bullish cryptocurrency supporters bearish in a short period of time.

Evidence of this reality was on full display on July 19 after the recovery of Bitcoin (BTC) back above $23,000 was met with widespread warnings that the move was merely a fakeout before the market heads for new lows.

While the possibility of new lows being set in the future can’t be ruled out, here’s a look at analysts’ opinions on how this BTC breakout could be different than most investors expect.

This time “it’s different”

The pointed message of “this time is different” was offered by pseudonymous Twitter user Trader XM, who posted the following chart outlining why BTC is poised to head higher.

BTC/USD 4-hour chart. Source: Twitter

As highlighted on the chart above, BTC price did not retest the range low even as four retests of the range high took place, and this suggests that buyers are now stronger than sellers.

In response to the post from Trader XM, Twitter user Justiinape replied “$27K-$28K seems imminent.”

Trader XM said:

“Agree my man, move to $27-28K then months of consolidation. Let’s enjoy this move before the long hibernation.”

The next major resistance is at $27,100

Further evidence that BTC could head higher was supplied by the on-chain data firm Whalemap, who posted the following chart highlighting the lack of buying demand between $23,000 and $27,000.

Bitcoin volume profile. Source: Twitter

Whalemap said:

“$27,100 should be the first resistance on our way up. Big gap in supply between current prices and $27K.”

Related: Bitcoin price moves toward $24K and traders expect further upside, after a support retest

Shorts get REKT

Proof that crypto traders had been lulled into an overly bearish outlook was provided by cryptocurrency analyst Dylan LeClair, who posted the following chart showing the effect that Bitcoin’s move above $23,000 had on the futures traders.

BTC/USD 2-hour chart. Source: Twitter

As highlighted on the chart, there was a large amount of Bitcoin short positions opened between June 15 and July 15, and these traders now find themselves on the losing side of the trade.

LeClair said:

“Tens of thousands worth of BTC short open interest currently underwater.”

While Bitcoin reversing course and heading lower once again remains a possibility, the current momentum suggests further upside in the short term.

The overall cryptocurrency market cap now stands at $1.055 trillion and Bitcoin’s dominance rate is 42.1%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin price moves toward $24K and traders expect further upside, after a support retest

BTC price is racing toward $24,000, but analysts warn that a lower support retest is needed to confirm the strength of the current breakout.

Crypto fans are rejoicing at the sight of green across the market on July 19 as the months of “down only” price action has finally come to an end after the market flashed its first substantial relief rally in at least a month. 

Data from Cointelegraph Markets Pro and TradingView shows that much of the newfound excitement is the result of Bitcoin (BTC) breaking above resistance at $23,000 to hit a daily high of $23,447, its first meaningful move above the 200-week moving average.

BTC/USDT 1-day chart. Source: TradingView

While many have been quick predict a climb to the mid-$30,000 range, a few analysts caution that it could be another fakeout pump. Let’s take a look at traders’ perspectives on Bitcoin’s move toward $33,000.

Bitcoin needs a weekly candle close above $22,800

The move back above the 200-week MA has been a point of focus for cryptocurrency analyst Rekt Capital, who posted the following chart commenting that “For the first time in weeks, BTC is putting in a decent effort to try to reclaim the 200-week MA as support.”

BTC/USD 1-week chart. Source: Twitter

The 200-week MA has been a highly watched metric in recent weeks because it has served as a reliable bear market indicator that has historically provided insight into when a bottom has been set.

Rekt Capital said,

“#BTC needs to Weekly Candle Close above $22800 to successfully confirm a reclaim of the 200-week MA as support.”

There’s still room for a pullback to $18,000

Further insight into what would need to happen to confirm a bullish perspective on the gains seen on July 19 was offered by Phoneix ICF, who provided the following chart highlighting the next major level of resistance to keep an eye on.

BTC/USDT 1-day chart. Source: Twitter

Phoenix ICF said,

“Wait for the 1d candle to close above $23K and then place long bets. If that’s not the case, we’ll see it below $18K soon. Be patient & avoid emotional trading.”

Related: Technicals suggest Bitcoin is still far from ideal for daily payments

Traders expect resistance at $28,400

The importance of the current price level was further explored by technical analyst Crypto Patel, who posted the following chart outlining the possible paths that BTC could take in the event of a sharp directional move from the current supply zone found between $21,700 and $22,800.

BTC/USDT 1-day chart. Source: Twitter

Crypto Patel said,

“Scenario 1:- If Break $22,900 Level then Ready for Long with $28,400 TP [take profit]. Scenario 2:- But If failed to hold $$22,800 then High Possibility to test $12K Level.”

Based on the current Bitcoin price, the chart above predicts a possible run-up to the resistance area near $28,400, followed by a consolidation or pullback before BTC attempts to take out the resistance found at $32,300.

The overall cryptocurrency market cap now stands at $1.062 trillion and Bitcoin’s dominance rate is 42.1%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Data points to a Bitcoin bottom, but one metric warns of a final drop to $14K

The bear market is far from over, but according to Glassnode, several metrics suggest that Bitcoin capitulation already occurred.

“When will it end?” is the question that is on the mind of investors who have endured the current crypto winter and witnessed the demise of multiple protocols and investment funds over the past few months.

This week, Bitcoin (BTC) once again finds itself testing resistance at its 200-week moving average, and the real challenge is whether it can push higher in the face of multiple headwinds or if the price will trend down back into the range it has been trapped in since early June.

According to the most recent newsletter from on-chain market intelligence firm Glassnode, “duration” is the main difference between the current bear market and previous cycles, and many on-chain metrics are now comparable to these historical drawdowns.

One metric that has proven to be a reliable indicator of bear market bottoms is realized price, which is the value of all Bitcoin at the price they were bought divided by the number of BTC in circulation.

Number of days Bitcoin price traded below the realized price. Source: Glassnode

As shown on the chart above, with the exception of the flash crash in March 2020, Bitcoin has traded below its realized price for an extended period of time during bear markets.

Glassnode said:

“The average time spent below the Realized Price is 197-days, compared to the current market with just 35-days on the clock.”

This would suggest that the current calls for an end of the crypto winter are premature because historical data suggests the market still has several months of sideways price action to go before the next major uptrend.

Will the bottom be closer to $14,000?

When it comes to what traders should be on the lookout for that would signify an end to the winter, Glassnode highlighted the Delta price and Balance price as “on-chain pricing models which tend to attract spot prices during late stage bears.”

Bitcoin realized, balances and delta prices. Source: Glassnode

As shown on the chart above, the previous major bear market lows were set after a “short-term wick down to the Delta price,” which is highlighted in green. A similar move in the recent market would suggest a BTC low near $14,215.

These bearish periods also saw the BTC price trade in an accumulation range “between the Balanced Price (range low) and the Realized Price (range high),” which is where the price currently finds itself.

One of the classic signs that a bear market is coming to an end has been a major capitulation event that exhausted the last remaining sellers.

While some are still debating whether or not this has occurred, Glassnode highlighted the on-chain activity during the June plunge to $17,600 as a possible sign that capitulation has indeed taken place.

Bitcoin total supply in loss. Source: Glassnode

At the time that BTC fell to $17,600, there was a total volume of 9.216 million BTC holding an unrealized loss. Following the capitulation event on June 18, a month of consolidation and a price rally to $21,200, this volume has now declined to 7.68 million BTC.

Glassnode said:

“What this suggests is that 1.539M BTC were last transacted (have a cost-basis) between $17.6k and $21.2k. This indicates that around 8% of the circulating supply has changed hands in this price range.”

Further evidence of capitulation having already taken place was the “staggering volume of BTC” that locked in a realized loss between May and July.

Bitcoin 30-day sum realized losses. Source: Glassnode

The collapse of Terra triggered a total realized loss of $27.77 billion, while the June 18 plunge below the 2017 cycle all-time high resulted in a total realized loss of $35.5 billion.

Related: Sub-$22K Bitcoin looks juicy when compared to gold’s market capitalization

Is this the end of the bear market?

One final metric that suggests capitulation has already occurred is the Adjusted Spent Output Profit Ratio (aSPOR), which compares the value of outputs at the time they are spent to when they were created.

Bitcoin adjusted SPOR. Source: Glassnode

According to Glassnode, when profitability is declining (as represented by the blue arrows), investors are to realize large losses that eventually lead to “a final waterfall moment of capitulation,” which is highlighted in red.

Glassnode said:

“The market eventually reaches seller exhaustion, prices start to recover, and investor pain starts to subside.”

In order to verify that capitulation has indeed taken place and accumulation is underway, Glassnode indicated that the aSOPR value would ideally need to recover back above 1.0.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Total crypto market cap reclaims $1 trillion as Bitcoin, Ethereum and altcoins breakout

The crypto market capitalization pushed above $1 trillion after notable weekly double-digit gains from BTC, ETH and several large cap altcoins.

Crypto traders found cause for celebration on July 18 as the total market capitalization climbed back above the $1 trillion mark following weeks of widespread selling after Bitcoin (BTC) price swept yearly lows below $18,000.

The green day for cryptocurrencies largely tracks a positive day in the traditional markets, which are up modestly despite analyst estimates that the Federal Reserve intends to raise interest rates by at least 75 basis points at the Federal Open Market Committee meeting on July 27.

Daily cryptocurrency market performance. Source: Coin360

While traders will welcome July 18’s positive price action, many analysts caution that the upswing is nothing more than a bear market pump. Let’s take a look at the current top performers.

Bitcoin holds a 16% gain

Data from Cointelegraph Markets Pro and TradingView shows that over the past week, Bitcoin has rallied significantly and at the time of writing BTC holds a 16% weekly gain from its recent low at $18,907.

BTC/USDT 1-day chart. Source: TradingView

The top cryptocurrency now finds itself running square into the resistance found at its 200-week moving average, which also happens to be the upper bound of the trading range BTC has been trapped in since the middle of June.

This level has proven to be a tough nut to crack over the past five weeks as multiple attempts to break above it have been met with rejection. It remains to be seen if Bitcoin will manage to break free of this level and move higher or spend longer trading between $19,000 and $22,000.

Ethereum Merge surge presents a 43% rally

Ethereum (ETH) has also experienced a boost in momentum and price over the past week, climbing 43% from a low of $1,005 on July 13 to a daily high at $1,530 on July 18, reaching its highest price since June 12.

ETH/USDT 1-day chart. Source: TradingView

Ether has been showing increased momentum since the successful July 6 completion of the Merge on the Sepolia testnet. A further boost to its price was provided on July 15 when it was announced that the mainnet Merge is predicted to take place on September 19.

While the September 19 date is still tentative and should be considered as a roadmap projection and not a hard deadline, the prospect of the Merge finally taking place after years of preparation is exciting the community and possibly driving demand for Ether.

Related: Bitcoin price nears critical 200-week moving average as Ethereum touches $1.5K

MATIC keeps moving

On the altcoin front, Polygon (MATIC) continues to lead the pack higher following a week of several major announcements including being selected to participate in Disney’s 2022 Accelerator Program, gaining 32.4% over the past 24 hours and trading near resistance at $0.94.

MATIC/USDT 1-day chart. Source: TradingView

Other notable gainers on the 24-hour chart include a 19.6% gain for STEPN (GMT), an 18.9% gain for Theta Fuel (TFUEL), and a 17.6% increase for Convex Finance (CVX).

The overall cryptocurrency market cap now stands at $1.019 trillion and Bitcoin’s dominance rate is 41.6%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

3 reasons why Bitcoin is struggling to flip $20K to support

BTC continues to sell-off, but analysts say investor sentiment could reverse when inflation peaks or traders feel that the situation with insolvent DeFi platforms is resolved.

The positive gains recorded in the first ten days of July have all but disappeared on July 13 as Bitcoin (BTC) and the wider market slid back toward new yearly lows.

Subdued action in the market can be traced back to a variety of factors, ranging from July 13’s record-high Consumer Price Index print and a raging U.S. dollar that recently hit its highest level since October 2002.

Data from Cointelegraph Markets Pro and TradingView shows that July 13 marked the fifth consecutive day of a declining BTC price, which hit an intra-day low at $18,910, following the declines across the major stock market indices.

BTC/USDT 1-day chart. Source: TradingView

As the world awaits a catalyst that can bring positive momentum back into global financial markets, here is what several analysts have to say about what’s next for Bitcoin.

Was Bitcoin’s latest surge the result of wash trading?

Bitcoin’s gains over the past week had sparked a new wave of optimism for some traders, but that optimism is likely to fade in the near term.  Data from Arcane Research shows that a majority of the momentum came from the removal of trading fees for certain Bitcoin pairs on the Binance cryptocurrency exchange.

Real Bitcoin daily volume (7-day average). Source: Arcane Research

According to Arcane Research, after the fee was removed, trading volumes on the exchange surged and this can be most likely attributed to “wash trading from traders seeking to exploit the fee removal to reach higher fee tiers.”

When looking at the crypto exchange ecosystem as a whole, however, activity remains subdued which is indicative of diminished interest in buying cryptos at the present moment.

Arcane Research said,

“All other exchanges saw muted trading volume last week, with the seven-day average trading volume sitting near 1-year lows, illustrating that the organic trading activity in the market is very muted at the moment.”

Extreme fear persists

Further evidence highlighting the lack of interest in buying Bitcoin can be found from the Crypto Fear and Greed Index, which is currently experiencing a “record-long 68-day streak” in the extremely fearfully territory.

Crypto Fear & Greed Index. Source: Alternative

As noted by Arcane Research, the spike to a score of 24 on July 10 was largely influenced by Binance’s decision to remove trading fees, which “led the metric to overstate the current market sentiment fearfulness.”

After the novelty of fee-less Bitcoin trading on the top exchange subsided and volumes returned to normal, the Fear and Greed index has descended back into the extreme fear zone.

Exchange outflows provide further evidence of the state of the market. Following the liquidation of Three Arrows Capital and the freezing of funds at platforms like Celsius, the rate that users have been pulling BTC off exchanges hit its highest level ever on June 26.

Related: 3 key metrics suggest Bitcoin and the wider crypto market have further to fall

Leveraged liquidity increases above $25,000

A final bit of insight into the factors keeping Bitcoin in its current trading range was offered by researchers at Jarvis Labs, who provided the following chart showing the dark bands of liquidity that exist below $18,000 and above $25,000.

Bitcoin liquidation map. Source: Jarvis Labs

According to Jarvis Labs, the appearance of highly leveraged liquidity signaled the possibility that BTC could make a run for $25,000 barring any unforeseen negative developments.

Jarvis Labs said,

“The caveat here is that for price to threaten that level, no more skeletons can get exposed within the cryptocurrency market, otherwise more forced selling can be triggered.”

While the way the price of BTC will move remains to be seen, the one thing that traders should prepare themselves for is the potential for increased volatility in the months ahead as rising global tensions, surging inflation and widespread pessimism suggest that the crypto market and world at large may be in for an extended bear market.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.