Bitcoin (BTC) Starts a New Week Near Key Resistance as the Shock of Latest US Inflation Data Passes – Can the Strength Continue?
The weekly close of July 17th may be practically the same as the previous one, but BTC/USD is showing some much-needed strength ahead of the Wall Street opening on July 18th.
Last week was a testing time for crypto holders everywhere, with inflation setting the mood for riskier assets and the US dollar limiting the gloomy atmosphere. With those pressures now easing – at least temporarily – the mood has room to rest.
Meanwhile, on-chain data suggests there is now a make or break moment for bitcoin miners, with the market as a whole seems to be nearing capitulation.
As Bitcoin’s macro bottom may continue to lie, Cointelegraph takes a look at a number of factors shaping BTC price performance in the coming days.
All eyes on the weekly moving average
Those watching the weekly charts on BTC will have a sense of déj vu this time around – BTC/USD ended July 17 below $100, where it was on July 10.
The latest weekly close is a disappointment in itself, with bitcoin wiping out last-minute gains for the past seven days printing a “red” candle.
What happened next, on the other hand, had the opposite tone – a bullish overnight march, with the largest cryptocurrency adding $1,400 in less than twelve hours.
All this leads to a familiar challenge on the intraday timeframe – BTC/USD as the 200-Week Moving Average (WMA) is approaching $22,000 and a key trendline at $22,600.
Acting as support in earlier bear markets, the 200 WMA has actually flipped to resistance this time, having lost mid-June and never reclaiming.
Therefore, analysts are eyeing the level as a key area of interest should the bulls be able to sustain the upward pressure.
For PlanB, the creator of the stock-to-flow family of BTC price models, a factor beyond spot price is meanwhile reinforcing its importance. As in previous bear markets, the 200 WMA briefly moved above the actual price of bitcoin this year, providing a classic market reversal signal.
Real value refers to the average price at which all bitcoins in existence last moved.
“The realized price in the bear market of 2014/15 and 2018/19 (blue) was above the 200WMA and the bull market did not start until the actual price and the 200WMA were touched,” PlanB Told With an accompanying chart of Twitter followers on July 17th.
“Now the price is realized and the 200WMA is already at $22K. For the next bull run we need the real price of BTC and above the 200WMA.”
As Cointelegraph reported, it looks like bulls need to play moving averages on longer time frames as well. In addition to the 200 WMA, the 50-week and 100-week exponential moving averages (EMA) are also included in the forecasts.
Data from Cointelegraph Markets Pro and TradingView shows that the 50 EMA is currently sitting above $36,000 and the 100 EMA at $34,300.
Ethereum nears $1,500 in potential trendsetter move
One catalyst that could propel Bitcoin above its key resistance mark at $22,600 could come from an unlikely source – the altcoins.
While Bitcoin in general moves up or down before copying other cryptocurrencies watch, this week, some are waiting to see if BTC/USD will follow the biggest altcoin Ether (ETH).
Ethereum has outperformed in terms of price growth in recent days, amid news that its transition to proof-of-stake (PoS) mining may be nearing completion, gaining 25% in the past week alone Is.
At the time of writing, ETH/USD was about to challenge $1,500 for the first time since June 12.
“$eth reclaims its 200 week moving average this week, BTC probably next week, bearish time is over,” said popular Twitter account Bluntz. Abbreviation that day.
Fellow commentator Light also believed that Ethereum’s strength should continue to put upward pressure on Bitcoin, noting liquidations among traders who ignore ETH moves and continue to lower BTC.
The shorts had days to get out on BTC. 0 The reason for shorting it when ETH did what it did.
A large asset in the ecosystem treats 40% of stokes looking for risk everywhere. This makes people think that the property can actually go up in price. This leads to catch-up/rotational flow. https://t.co/nae0WIys9M
— Light (@lightcrypto) 18 July 2022
Cross-crypto short liquidations totaled $132 million in 24 hours on July 18, confirms data from on-chain monitoring resource Coinglass.
However, going forward, not everyone is convinced that Ethereum will be able to break its overall downtrend, resulting in clear implications for other coins.
Cointelegraph contributor Michael van de Poppe argued that the pull of the weekend’s CME futures gap on bitcoin could provide a negative force to punctuate optimism.
CME futures ended their last trading day, July 15, at around $21,200.
“With the potential for a CME gap below us (and bitcoin floating around the previous CME gap), I would not be surprised by a fake-out move and short for $ETH,” he wrote in a statement. Update,
“Looking for a long run near the $1,250-1,280 zone.”
The strength of the dollar is finally in favor of bitcoin
On the subject of macro movements, the scenario overall looks less frenetic, which greeted crypto investors last week.
Inflation figures have come and gone, and the debate over whether inflation is peaking in the US settles down until the next consumer price index (CPI) print in August.
The Federal Reserve will decide on how to deal with inflation in relation to key interest rate hikes later this month, with the Federal Open Market Committee (FOMC) still scheduled to meet on July 26.
Any macro signal when it comes to BTC price action will come from other regions, with geopolitical triggers high on the list of potential factors.
Asian markets were strong as the week started with a slight correction in Chinese tech stocks, which were earlier hit by the coronavirus pandemic.
At the same time, the US dollar, the star of recent weeks as equities across the world felt pressure, began to consolidate its gains.
The US Dollar Index (DXY), whose strength has long been inversely correlated with the cryptocurrency’s performance, moved south that day at 108, having hit a two-decade high last week.
“Finally Seeing a Drop on the Daily,” Twitter Analyst Eicherks commentedHighlighting the potential for DXY to test a trendline from May.
“Even a fall in this trend line will be big for stocks and crypto. The Fed will be perfectly lined up with a bullish week ahead of the meeting.”
Fellow account Ricus also felt that bitcoin “won’t break again” even though a pullback is still possible – thanks to the DXY cooldown and a strong end to 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 the resistance level..I see..I personally don’t think we break out again though I am looking for a pullback I am looking for pic.twitter.com/KcYRJFrrbS
— rickus (@rickus_trades) 17 July 2022
0xWyckoff, creator of crypto trading resource Reckitt Academy, “This week should give room for a surge in equities and crypto unless it finds close support.” couple In part of a formula about DXY.
one in separate observation Meanwhile, Dan Tapiero, managing partner and CEO of 10T Holdings, said a macro USD higher against the Chinese yuan should be a turnaround point for BTC.
“The last 3 major BTC highs in 2014, 2018 coincide with Chinese RMB/USD lows,” he said in part of a tweet on July 18.
“This indicates that the USD peak will soon support BTC lows.”
Miners dump 14,000 BTC in days
With so much hope that a trend turnaround could be on the cards, on-chain data showing bitcoin miners selling inventory looks all the more bleak.
As of July 14, miners removed a significant portion of BTC from their reserves, according to data from on-chain analytics platform Cryptoquant.
The effect was that mining reserves fell to their lowest level since July 2021, a point that also pushed the price of BTC down.
Reserves stood at 18.4 million BTC on July 14, compared to 14,000 BTC on July 14.
For Cryptoquant contributor Adris, the numbers were an encouraging sign, indicating that miners are now contributing to establishing a macro BTC price floor.
“Bitcoin miners are finally surrendering,” he Abbreviation in the weekends.
“BTC price has been consolidating at the $20K level for the past few weeks, leaving investors wondering whether an accumulation or distribution phase is underway. Looking at the miners reserve chart, it seems that the latter is the case. “
Meanwhile, macro analyst Alex Kruger described June’s sales of miners hailed as “a clear sign of surrender,” adding that miners “accumulate along the way and vomit when things go bad.”
RSI Spark “Very Rare” BTC Price Inflection Point
Finally, a “rare” event on the bitcoin charts may have provided the fuel for the historical turnaround, the analysis suggests.
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Taking a BTC/USD chart from the beginning of bitcoin’s lifespan, StockMoney Lizard notes that bitcoin’s relative strength index (RSI) is now at a suitable low and that combined with a touch of a log chart trendline has shown the largest BTC price. gave rise to recovery.
“The current exciting and very rare situation now,” it announced at the end of the week.
“RSI below 45 and logarithmic bottom showed a major reversal in the past, followed by a crazy bull run. Cross = RSI < 45 + log. Bottom.”
An attached chart shows the strength of such an event, which follows the RSI reaching its lowest level on record.
Meanwhile, according to Coinpix analyst Johnny Sjerdi, bitcoin needs to break the 50 mark on the RSI, a key resistance area in recent months, to avoid the risk of a fresh selloff.
GM! #bitcoin is at a turning point. It has not been able to break the 50 RSI from 3/14. It rejected it 5 times since 4/20. Note the vertical lines where it coincides with the big sell-off. With volume, if we see a rejection here for the sixth time, it could mean another selloff. pic.twitter.com/znZNpfJ3K8
— johnny sjerdi (@johnnyszerdi) 17 July 2022
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