Bitcoin (B T c) Depending on the source a new week begins as a recession or a firm “buy” – what happens next?
After a week of unaffected price performance, the largest cryptocurrency is still stuck in the $ 30,000 lower range.
Worries about inflation have traditionally bode well for bulls, with markets and the summer months still be cause for celebration. In bitcoin, however, anything can happen, and surprises swing both ways.
Coin telegraph market Take a look at five factors to consider when charting where BTC / USD can proceed.
Inflation spoils the macro mood
It is a quiet day for stocks and commodities due to holidays in the United States, the United Kingdom, and elsewhere in the West.
That said, Asian markets are mostly stable anyway, as traders gear up for the start of a traditionally slow summer period.
However, zooming out, and the picture is definitely less stable. Sources are telling the mainstream media that the reason for this is inflation.
There has long been concern among international rebound from coronovirus due to the creation of central bank liquidity, with the long-term impact of engineered “recovery” looming large in the horizon worldwide.
Some telltale signs are already here, such as rising manufacturing costs that may not be fully reflected.
“Policymakers have tended to accept higher levels of inflation, higher volatility in inflation, and you will see inflation rising structurally as it happens,” said Mixo Das, an equity strategist at JP Morgan Asia. Told Bloomberg
“I don’t think it’s in the prices right now.”
Given the fixed supply of cryptocurrency and the decreasing issuance curve, inflation is by its nature contrary to a bitcoin standard, which cannot be manipulated.
As such, the demand for institutions and people with high risk of cash should continue to rise in line with inflation, which is increasingly being tolerated by central banks at high levels.
In a debate about the energy use of bitcoin earlier this month, Saffadian Ammos, author of “The Bitcoin Standard”, said. suggested That about 10% of global wealth is already depleted every year from inflation.
Weak hands can’t stop selling
This is a somewhat disappointing picture for bitcoin traders on Monday as the weekend failed to signal a rapid price rebound.
At the time of this writing, the price of BTC / USD is under $ 36,000, which has slowly moved downward since reaching a local high of $ 41,000 last week.
These came soon after another re-test of the high $ 30,000 support, which boosted bitcoin to $ 31,000, reinstated Familiar Business Corridor It has shifted since the first dedication event in May.
Depending on who you ask, this setup is either a golden opportunity or a nightmare – and the segmentation matches the market experience.
According to the latest data from on-chain monitoring resource Glasnod, at current levels, older hands are adding to their BTC stack, while recent buyers continue to sell them.
This is the classic “weak-to-strong” direction Nothing new, But its speed is increasing.
Miners, too, are back to buy, reversing a brief cascade of selling, which was the first drop to $30,000.
“This chart is crazy!” The popular Twitter account Lark Davis reacted, Evoking a sense of excitement among long-time market participants.
“Miners and long-term holders are accumulating, only short-term holders are selling. This creation is eternal and infinite!”
Bitcoin’s Weekly Relative Strength Index (RSI), a Key metrics To split the overbought and oversold area, it is also making a low detour that has only been beaten by the March 2020 crash and the surrender of $ 3,100 in December 2018.
Major prices cause headaches for average bulls
With reference to bull or bear, “Lines in the sand“For traders that bitcoin still needs to be preserved to maintain their bull market crown.
In its Latest market update, Trading Suite Decentrader highlighted the 200-day moving average (DMA) and 20-week moving average (WMA) as key levels to watch.
The 200 DMA currently sits above $ 40,000 – the place where BTC / USD saw the rejection last week – while the 20 WMA is closer to $ 49,000.
“Should bitcoin get enough demand in the low 30s, 20 WMA would be expected to act as resistance,” Decentrader summarized.
“A decline could make the lower $20 or 78.6% retracement a potential target. Hence, the price action next week is especially important.”
The idea that bitcoin might return to its 2017 high of $20,000 is unpopular to many, including PlanB, the creator of the stock-to-flow-based (S2F) price model.
Recognizing that their models are still being “tested” by price fluctuations, the idea of a new dedication of up to $ 20,000 is not something they are likely to do.
“Of course I disagree, S2F and on-chain point to very high prices ($ 100-288K). Time will tell,” he said During a Twitter discourse last week.
He said that the “received price” of bitcoin – BTC / USD calculated based on the price at which each coin was last transferred – is now $ 23,000. During the bull run of 2013 and 2017, realized that value had increased by an order of magnitude, and they were yet to be copied this year.
“At $ 23K we have some way to go IMO,” he Commented With a chart showing the actual price over 200 WMA.
Is this the worst May ever? In terms of bitcoiners’ monthly returns, it certainly looks like this.
On the last day of May 2021, the mood can be anything but positive, as the monthly loss for hodlers is about 40% of the total.
By comparison, May 2017 and 2019 are an attractive month for BTC / USD, for example, the pair increased by more than 50% in May.
2018 was an outlier with a 19% loss, but these are also lower compared to this year. May 2021 is currently on its way to being the worst month since 2013 in terms of performance for both Q1 and Q2.
And yet, doom and gloom is far from everywhere. Beyond bitcoin, altcoin markets are showing signs of life, led by a sustained rally Xrp, Up 13% on the day.
As noted by traders, the volume for the largest altcoin ether (ETH) Are particularly promising, and vice versa is market behavior that tends to see less trading activity.
Trader Cypto Ed said, “We shouldn’t worry too much about a weak BTC because it can follow strong ALT / USD pairs or continue their chop / sideways.” concluded.