BTC price climbs on its way to $ 40,000: 5 things to watch out for about Bitcoin this week
A rally to $ 40,000 gives hope to those who have endured months of falling prices, but is it enough for the bull market to continue? The price of Bitcoin (BTC) is approaching $ 40,000 this Monday; the new week begins with bullish momentum. A quiet but confident weekend culminated in a spectacular climb overnight on Sunday; The BTC / USD pair quickly approached the top of its multi-month trading range. With favorable fundamentals, Bitcoin appears ready to explore levels not seen in several weeks.
What could determine price action as the week continues? Cointelegraph takes a look at five factors to consider when charting BTC’s price action in the coming days.
Bitcoin sets its eyes on the $ 40,000 mark
Spot price action is naturally the topic on everyone’s radar; In 24 hours, Bitcoin has sealed gains of almost 15%. Although it has yet to break from $ 40,000 to resistance, current levels haven’t been there since mid-June, and bullish appetite is palpable. It got off to a slow start after last week’s “The B-Word” conference, in which the likes of Jack Dorsey and Elon Musk praised Bitcoin. However, the bullish momentum was not immediately apparent; Progress was slow as analysts remained wary of a market they thought could still easily collapse to new cycle lows.
However, the price of Bitcoin rose slowly throughout the week, reaching $ 34,500 over the weekend and opening up the prospect of a run to the upside. A push move was widely anticipated, including by Cointelegraph contributor Michaël van de Poppe; potential targets within the range were set for the medium term, and $ 42,000 was the cap. On Monday, however, even van de Poppe seemed impressed by the veracity of the upward move, calling it a “surprise.” “After such a move by Bitcoin, altcoins will follow suit,” he predicted on Twitter.
“Some are doing very well on their BTC peers, as Cardano and Ethereum are bouncing very well. Brilliant!” Colleague Crypto Ed was more cautious. Highlighting the Elliott Wave analysis, he argued that even a bull market return would not be without sticking points, and that BTC could still return to the $ 29,000 mark after touching $ 42,000, based on his previous predictions. “It does not mean that we go up in 1 straight line, pullbacks / corrections / repeats will occur after breaking above $ 42,000, but new lows are highly unlikely once the $ 41,500 – $ 42,000 mark is breached,” he reasoned Monday.
China lowers equity sentiment
Bitcoin’s declining relationship with traditional markets is back in the spotlight, making price action seem even more “impulsive.” Although the rise in stocks has been accompanied by a flat or even negative performance of the BTC / USD pair recently, the tables have turned in recent days. Now, equities are taking a toll from the Chinese headwinds, while Bitcoin soars.
An analyst told Bloomberg on Monday that Beijing’s crackdown has overshadowed the previous strength of US markets, and this, combined with mounting concerns about inflation and reduced central bank stimulus, creates an unstable mood. “The second half of the year is going to be this half-full, half-empty context,” Virginie Maisonneuve, global director of equity investments at Allianz Global Investors, told the publication’s television network.
While cryptocurrencies remain fraught with tension, the strength of the US dollar in the short term is also worth paying attention to. The US Dollar Currency Index (DXY), which is currently still on the rise, is expected to hit local highs around the 94 mark before falling again, with this latest move giving Bitcoin some real breathing space.
Until then, however, DXY could end up putting pressure on the cryptocurrency markets. “I expect DXY to drop further in the next few days; BTC should see a more relieved bounce because of that,” he said Thursday alongside an accompanying chart. “As tweeted a couple of times before: The real strength for cryptocurrencies returns when the DXY completes the move to the red box and goes for the green box.”
$ 111,000,000 in shorts settled in 10 minutes
Is a hike always good? Not if you are short of BTC
As commentators were already suggesting recently while the BTC / USD pair was still near $ 30,000, the “maximum pain” scenario would likely not be one of further losses, but rather a dramatic pullback to the upside. That’s exactly what happened: The 15% gains overnight took a toll on market participants who were convinced a dip was coming.
According to tracking resource Bybt, 24-hour settlements totaled $ 1.1 billion on Monday, the most since May 18. “$ 111,000,000 in shorts was liquidated in 10 minutes,” added analyst William Clemente, citing more data from analytics firm Glassnode. It is by no means the first time that bearish momentum has been caught off guard – the nature of Bitcoin has guaranteed time and time again that overly negative ones end up being pushed out.
Difficulty turns positive after 2 months
Bitcoin’s rally in fundamentals, which has been going on much longer than the price rally, continues unabated this week. The hash rate is approaching 100 exahashes per second (EH / s) again, a positive sign that has been accompanied by an increasing decentralization of the overall hash rate.
Gains were quick over the past week, when the hashing rate was still near the local lows of 83 EH / s. At its peak, before the price drop in May, the hash rate reached 168 EH / s. A similar story is evident regarding the difficulty of the network, which at the time of this writing is projected to increase around 3.7% in the next readjustment within five days.
If this happens, it will be the first positive change in the difficulty since the mining crisis in May, and a strong signal that the effects of the accompanying turmoil have been mitigated. Although it is a dubious topic, the concept of “ecology” of Bitcoin is still an important topic; Big miners take advantage of the narrative to reassure markets skeptical of Bitcoin’s longevity.
The statistics speak for themselves: renewable and sustainable energy increasingly powers the Bitcoin network as miners move to suitable jurisdictions.
Record “fear” continues
Those concerned that price gains may be a case of “too soon” may be encouraged, as they have been accompanied by a relatively calm sentiment. According to the Cryptocurrency Fear and Greed Index, the rise to $ 40,000 has not changed the general mood of the market based on “fear”. On Monday, the index measured 26/100 – signaling fear rather than greed or a “neutral” atmosphere – implying that Bitcoin could rise higher without investors feeling too greedy and ready to sell.
“Bitcoin’s fear and greed index has been below 40 for more than two months, the longest period in history,” Danny Scott, CEO of Coin Corner, noted last week. “However, we are still in a price range greater than $ 30,000”
In recent months, “extreme fear” has reigned, a trait that has recently characterized traditional markets as well.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.