This Unexpected Factor Suggests Bitcoin May Crash From $9,000s, Not Rally

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This Unexpected Factor Suggests Bitcoin May Crash From $9,000s, Not Rally


Bitcoin is in no man’s land. Just look at the chart below from analyst Josh Rager, which shows that BTC hasn’t even moved out of the $8,500-10,000 range for eight weeks:

“BTC’s range is clear. Current support that has been holding the past three weeks is the mid-range Break down here and price likely to see $8900 followed by $8500 range bottom.”

Bitcoin

Chart of BTC’s price action over recent months by Josh Rager (@Josh_rager on Twitter). Chart from Tradingview.com

The longer this consolidation has gone on, the more bullish analysts have become.

Yet, one trader recently explained an unexpected factor that indicates Bitcoin may actually fall from the $9,000s.

Bitcoin’s Consolidation Doesn’t Scream a Market Top

Because Bitcoin has held the $9,000s for so long, many analysts have turned bullish. Eric Thies noted that Bitcoin’s price action over the past two months looks nothing like any of the market tops seen over the past two years:

“BTC stucturally looking less like a local top and more like a launchpad as of now. Naturally speaking, things may need to go down before they really go up but this time looks promisingly different.”

Bitcoin

Bitcoin “top” analysis by Eric Thies (@KingThies on Twitter). Chart from TradingView.com

The idea goes that since Bitcoin has yet to break down from the current range, this is more likely a pitstop in a bull market rather than a bearish reversal.

Not everyone is convinced this is the case, though.

There’s a Chance BTC “Breaks Down” From Here: Analyst

There may be strong arguments that this range is bullish, yet there remain signals and sentiment indicating Bitcoin will drop:

The aforementioned unexpected factor was explained by a trader as follows:

“It is possible that since this Bitcoin structure was very spot driven, that we can all be right at the same time in thinking this breaks down. The spot drive was from the same retail Robinhood types that were indiscriminately buying risk assets across the board.”

That’s to say, Bitcoin is currently being propped up by “retail” buyers also bidding the S&P 500 higher. These investors are seemingly disregarding macroeconomic and market factors imply an underlying bear trend in markets.

Once they run out of money or they begin to acknowledge risks, the market will begin to roll over, his comment seemingly suggested.

Another trader has echoed the expectations of a move to the downside.

Referencing the chart below, an analyst claimed that sellers likely remain in control of the Bitcoin market and could take the cryptocurrency under $7,000:

“A couple more clues developing that lend themselves to HTF distribution. 1. Rising Demand on the verge of failing. 2. Side by side, ascent vs descent with selling the dominant pressure from volume.”

Bitcoin

Bitcoin distribution analysis shared by trader “Cold Blooded Shiller” (@Coldbloodshill on Twitter). Chart from TradingView.com

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This Unexpected Factor Suggests Bitcoin May Crash From $9,000s, Not Rally

This Alarming Pattern Suggests Bitcoin Could Soon Crater Lower

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This Alarming Pattern Suggests Bitcoin Could Soon Crater Lower


  • As Bitcoin continues its range-bound trading phase, traders are placing their bets on which direction it will trend next
  • This consolidation has caused the cryptocurrency’s volatility to plunge to lows not seen in over a year
  • It is unlikely that this trend will last for too much longer, as extended bouts of sideways trading are typically followed by massive movements
  • One technical pattern that is strikingly similar to that seen in 2019 is now suggesting that Bitcoin could be positioned to see notable downside in the coming weeks
  • This comes as one analyst notes that it is “do or die” time for Bitcoin

Bitcoin and the aggregated cryptocurrency market have struggled to garner any clear momentum in recent times.

This is primarily due to the benchmark cryptocurrency’s multi-month bout of sideways trading that it has been caught within since May.

As for where the cryptocurrency could trend next, it does appear that the signs are all pointing in favor of sellers.

In addition to being unable to surmount a crucial level that it was rejected yesterday, the crypto has now dipped below $9,000 on multiple occasions without any ardent response from buyers.

One technical pattern similar to that seen in June of 2019 also spells trouble for what could come next.

Bitcoin Fails to Bounce After Posting Rejection at a “Bounce or Die” Level 

At the time of writing, Bitcoin is trading up marginally at its current price of $9,100. The crypto has been trading at this level for the past few days.

Earlier this week, buyers attempted to catalyze some momentum that led it to $9,300 before it faced a harsh rejection.

As Bitcoinist reported yesterday, the rejection at $9,300 coincided with a rejection at the crypto’s 200-day EMA. As cited in the report, one analyst noted that it is now a “bounce or die” moment for BTC.

“4h was rejected from resistance of cloud (200 ema). Now resting on 21ema – bounce or die.”

Bitcoin

Image courtesy of Teddy. Chart via TradingView.

It has maintained above its 21-day EMA in the time since but has yet to post any bullish reaction to this support.

This Pattern from 2019 Spells Trouble for BTC

In the summer of 2019, when Bitcoin posted its intense rally to highs of nearly $14,000, it formed a distribution pattern that ultimately resulted in its price entering a yearlong downtrend.

This decline eventually led it to lows of $3,800 this past March.

One analyst is now noting that there is a striking correlation between the distribution pattern seen last year and that being formed presently.

“90 day distribution at $10k – $13k vs 60 day current range for BTC,” he said while pointing to the below chart.

Image courtesy of Cold Blooded Shiller. Chart via TradingView.

If this pattern plays out as it did last summer, the crypto could soon see some significant losses.

Featured image from Shutterstock.
Charts from TradingView.

Here’s the “Do or Die” Price That Will Determine Ethereum’s Macro Trend

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Here’s the “Do or Die” Price That Will Determine Ethereum’s Macro Trend


  • Ethereum has remained stuck beneath its crucial near-term resistance level at $230
  • The crypto has been ranging sideways alongside Bitcoin and many of its peers, but it has been unable to remain within its long-held trading range
  • The break below this range appears to be a grim sign for the crypto
  • Where it trends next could largely depend on how it reacts to a crucial level that it is trading 10% above
  • Holding above this level is crucial for the cryptocurrency’s macro structure

Ethereum has continued trading in close tandem to Bitcoin – leading it to see an incredibly tight bout of consolidation as its buyers and sellers reach an impasse.

As for which direction it will trend next, it does appear that this could depend largely on its reaction to a crucial level that sits in the lower-$200 region.

One analyst is noting that a maintained defense of $210 could be enough to allow ETH to garner some significant upwards momentum.

He even notes that this momentum could lead the crypto up towards $350 in the near-term.

There is one grim technical factor that seems to suggest a test of this level is imminent.

Ethereum Consolidates Beneath Crucial Trading Range Following “Death Cross” Emergence

At the time of writing, Ethereum is trading up marginally at its current price of $227. The crypto has been hovering around this price level for many days now, struggling to recapture its position within its long-held trading range.

Analysts are now noting that ETH could be technically weak and see a decline independent of Bitcoin.

One factor supporting this notion is the recent emergence of a dreaded “death cross” – the likes of which have not been seen since last March.

Bitcoinist reported about this pattern earlier this week, citing an analyst who said:

“Confirmed, death cross here as well – didn’t happen since March.”

Ethereum

Image Courtesy of Teddy. Chart via TradingView.

Death crosses like this tend to be trailing indicators that point to underlying weakness.

Analyst: $210 is a Crucial Level that ETH Buyers Must Defend 

The weakness that helped shape this death cross could lead Ethereum down towards its critical high time frame support at $210.

One analyst believes that the reaction to this level will determine the crypto’s future.

“ETH aiming for $350 this year in my opinion… As long as we hold $210 this is still valid. Thinking we flip $350 and see $500 taken out next year,” he said.

Image Courtesy of Cactus. Chart via TradingView.

Despite his bullish sentiment, it is essential to note that a break below this level could have grave consequences, potentially throwing Ethereum into an intense downtrend.

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Charts from TradingView.

Bitcoin’s Volume is at the “End of the Line” Signaling Volatility is Imminent

Bitcoin

Bitcoin’s Volume is at the “End of the Line” Signaling Volatility is Imminent


  • Bitcoin’s range-bound trading is showing no signs of letting up as the crypto continues trading sideways within the lower-$9,000 region
  • It does appear to be laying the groundwork to make a massive movement
  • Data suggests that this movement could be imminent in the days ahead, potentially setting the tone for which direction it trends next
  • There are a few other factors that are likely to influence its near-term price action as well
  • One analyst notes that the direction BTC trends after making this big movement will signal “real direction”

Bitcoin and the aggregated cryptocurrency market have been caught within an extended bout of sideways trading throughout the past several days and weeks, struggling to garner any clear momentum.

This trading range first began establishing itself at the start of May, and in the time since BTC has primarily ranged between $9,000 and $10,000.

On a few brief occasions, the crypto has broken both above and below this trading range, hitting highs of $10,500 and lows of $8,500.

Which direction it trends next may depend on a few vital factors that one analyst is closely watching. He indicates that the next move Bitcoin makes will provide it with a “real direction.”

Bitcoin Volatility Levels Hit a One Year Low

At the time of writing, Bitcoin is trading up marginally at its current price of $9,100. This is around the price point at which the crypto has been trading for the past couple of weeks.

Yesterday, sellers did try to force BTC below the lower boundary of its long-established trading range, causing it to dip as low as $8,950.

This breakdown was short-lived, however, as the selling pressure was quickly absorbed by buyers.

This price action – just like all that seen over the past two months – has caused Bitcoin’s volatility levels to dive.

According to data from analytics platform Skew, they just reached lows not seen in over a year.

“BTC 1mth ATM Implied Vol reaches a 1Y+ low at ~46%.”

Bitcoin

Image Courtesy of Skew.

These bouts of extremely low volatility usually don’t last for long, meaning that Bitcoin could be positioned to make a massive movement in the days and weeks ahead.

Volume Trend Reaches the “End of the Line” as Analysts Expect Volatility 

One popular cryptocurrency analyst on Twitter explained in a recent tweet that he is closely watching a few crucial factors for insight into which direction Bitcoin will trend next.

He points to the crypto’s declining volume trend reaching the “end of the line” as well as a few other factors.

“Volume trend reaching end of the line. All closes outside local ranges were fakeouts. Watch for this behaviour to break – good odds it’ll signal real direction. Local unconfirmed (skewed) iHS neckline lines up with diag resistance from ATH to now.”

Image Courtesy of Bitcoin Jack. Chart via TradingView.

Once its volume begins picking up, it will likely translate into volatility.

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Charts from TradingView.

Why Tezos And Chainlink—Bluechip Assets of 2020—Saw Opposite Moves This Week

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Why Tezos And Chainlink—Bluechip Assets of 2020—Saw Opposite Moves This Week


  • Chainlink, the twelfth-largest crypto token by market, surpassed its close competitor Tezos on a week-to-date timeframe.
  • While LINK/USD surged by up to 7.45 percent, the XTZ/USD pair plunged by as much as 6.96 percent.
  • Both the tokens outperformed their peers across the market this year, but XTZ failed to sustain its bullish momentum due to bad publicity and unfavorable technical bias.

Chainlink is now above Tezos by market capitalization–and it seemingly intends to keep it that way.

The twelfth-largest crypto asset extended its bullish bias in a week that saw Bitcoin trading cautiously in a tightly-knit price range. The LINK/USD exchange rate jumped $0.43, or 7.45 percent, to establish its week-to-date high at $4.93.

Meanwhile, the thirteenth-largest Tezos failed to attract enough traders to sustain its bullish momentum. The XTZ/USD exchange rate fell by $0.17, or 6.96 percent, from its Monday opening rate to change hands for $2.26.

Trust Issues

The polar opposite moves between the two cryptocurrencies appeared despite organic growth in both blockchain projects. On July 1, cryptography firm Bolt Labs launched its private payment solution zkChannels atop Tezos’ blockchain, signifying demand for its native XTZ tokens.

The news came when XTZ/USD was still trading more than 70 percent higher on a year-to-date (YTD) timeframe. But its arrival coincided with a confluence of bearish indicators – both fundamental and technical.

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Tezos’s XTZ token breaks below its ascending trendline support in purple. Source: TradingView.com

At first, XTZ had reversed violently from its YTD top near $3.22. The downside correction saw no profound friction from bulls. XTZ eventually broke below its Ascending Trendline support and formed a super predictive Death Cross between its 20-DMA and 50-DMA.

The plunge also came as the Tezos Foundation reportedly agreed to settle a lawsuit from law firm Block & Leviton for a whopping $25 million. Traders may have interpreted that Tezos founder Justin Sun would initiate a massive sell-off of XTZ tokens to pay the plaintiff, which intensified its bearish bias.

Tezos is now standing right above a make-or-break support level of its 200-DMA (the orange wave). If the cryptocurrency breaks below it, then the sell-off may continue towards $1.85, a historical price floor for XTZ.

Chainlink Untouched by Bears

Chainlink’s native crypto LINK is trading 169 percent higher on its YTD timeframe as it keeps both its fundamental and technical indicators under a bullish watch. Just less than 24 hours ago, Singapore-based cryptocurrency exchange Huobi announced that it would run a Chainlink node.

Meanwhile, on June 30, blockchain-enabled gaming firm Polyient Games declared that it would use Chainlink’s blockchain to distribute rewards among its users.

The LINK token also appeared healthy on technical fronts, with its price holding above concrete support levels, unlike XTZ.

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Chainlink’s LINK token maintaining bullish bias above critical support levels. Source: TradingView.com

The LINK/USD exchange rate, for instance, continued to trend higher while maintaining support above its ascending trendline. The pair also kept a steady price floor above its 20-DMA, with its 50-DMA lurking way below to even attempt a Death Cross formation.

That somewhat explains why the so-called blue-chip crypto assets are moving in opposite directions this week.

Photo by Andrew Shiau on Unsplash

Bloomberg Analyst: Key Metrics Show Bitcoin Should Rocket Towards $12,000

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Bloomberg Analyst: Key Metrics Show Bitcoin Should Rocket Towards $12,000


It’s been a slow past few weeks for the Bitcoin market. The cryptocurrency has effectively been range-bound for two months, registering no concrete trend.

Despite this, blockchain analytics firms have observed an increase in usage of BTC. Santiment reported on July 2nd in reference to the chart below:

“Just two days after ETH recorded its highest network activity since 2018, the number of daily addresses interacting with BTC also surged to a 2-year high of 1.07M yesterday! The last time BTC’s daily address activity was this high was Jan. 17th, 2018.”

Bitcoin

Chart from Santiment (@santimentfeed on Twitter) showing the number of daily active addresses on Bitcoin. 

That’s not all. As reported by Bitcoinist previously, an on-chain analyst observed that the number of new BTC addresses and the number of transactions also hit notable highs.

According to a Bloomberg analyst, this spike in on-chain Bitcoin usage warrants a higher BTC price.

Bitcoin Strengthening On-Chain Metrics Imply an Imminent Rally

On July 2nd, Bloomberg Intelligence’s Mike McGlone released the company’s latest crypto outlook. Entitled “A Resting Bitcoin Bull,” McGlone held his bullish sentiment that he has touted in these monthly reports since the start of 2020.

Core to his expectations of upside is the spike in the on-chain usage of Bitcoin.

Referencing similar data to that Santiment laid out, McGlone wrote:

“The number of active Bitcoin addresses used, a key signal of the 2018 price decline and 2019 recovery, suggests a value closer to $12,000, based on historical patterns. Reflecting greater adoption, the 30-day average of unique addresses from Coinmetrics has breached last year’s peak.”

The analyst added that the last time this metric exceeded its last high, Bitcoin rallied from the “depths of a bear market.”

As to where exactly this trend will take Bitcoin, McGlone implied a move towards $12,734 when he wrote:

“Unless advancing addresses abruptly reverse, history suggests Bitcoin may gravitate toward that level.”

Far From the Only Trend Signaling Upside

The strong on-chain usage of Bitcoin isn’t the only thing that has McGlone expecting cryptocurrencies to sustain a move to the upside.

The senior commodity analyst at Bloomberg identified the following confluence of trends as signals indicating BTC has room to grow:

  • From a macro perspective, BTC is still outperforming most of the “highly speculative crypto assets.”
  • The Bitcoin futures on the CME have continued to see adoption, confirming “Bitcoin’s maturation pace and higher-price tilt.”
  • Grayscale’s Bitcoin Trust has seen extremely strong demand from retail investors and institutions.
  • BTC has continued to trade more like gold, suggesting a maturing market and the cryptocurrency being influenced by macro factors.
  • And finally, the “unparalleled global central-bank easing and the rising price of gold” is likely to act as a boon for Bitcoin to move higher.
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Bloomberg Analyst: Key Metrics Show Bitcoin Should Trade At $12,000

Cardano (ADA) Is Forming the Signal That Preceded a 75% Crash: Analyst

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Cardano (ADA) Is Forming the Signal That Preceded a 75% Crash: Analyst


Despite Bitcoin’s stagnation, Cardano (ADA) has performed extremely well over recent weeks.

Data from crypto research firm Messari shows that the leading altcoin is up 150% since the start of the year. This is a much better performance than almost all top-50 cryptocurrencies, save for a few outliers in the DeFi space.

Cardano

Cardano vs. other smart contract cryptocurrencies since the start of 2020. Chart from Messari

A full-time trader, however, thinks that ADA’s outperformance won’t last for long. He shared a chart indicating that the cryptocurrency has formed the same bearish signal last seen at Cardano’s 2019 peak.

Cardano’s Bullish Trend May Not Last For Long: Trader

A trader shared the image below on July 1st, noting that Cardano’s performance charted against Bitcoin is forming a bearish divergence. The analyst’s indicator is trending lower while prices trends higher, suggesting underlying weakness:

“The reason I’m building the ADA short here. If we invalidate the divergence I’m happy to step out the way. Until then I’ll continue to slowly build this position until the div confirms, at that point I can ramp up,” he commented on the chart.

The divergence that has formed is especially pertinent as it formed prior to ADA falling ~75% against Bitcoin from Q2 2019 to Q4 2019.

Cardano

Cardano (ADA) analysis by full-time trader Cold Blooded Shiller (@ColdBloodShill on Twitter). Chart from TradingView.com

Buy the Rumor, Sell the News?

ADA’s extreme outperformance over recent weeks has largely been tied to the asset’s underlying fundamentals.

As of the time of this article’s writing, the underlying Cardano blockchain is going through what is known as its “Shelly” upgrade.

Shelly is a phase of the blockchain’s development that will increase its performance while optimizing for decentralization. This will be done through a Proof of Stake system. As the Cardano Foundation explains:

“Shelley will also see the introduction of a delegation and incentives scheme, a reward system to drive stake pools and community adoption… Come the end of the Shelley era, we expect Cardano to be 50-100 times more decentralized than other large blockchain networks.”

With ADA rallying off that implementation, the cryptocurrency could see a “sell the news” drop afterward. This is similar to what happened with Bakkt and Bitcoin in 2019 and the CME/CBOE futures rally in 2017.

Cardano’s Fate is Tied to Bitcoin

In some senses, the fate of ADA’s price trajectory is tied to that of Bitcoin. After all, Coin Metrics data shows that the two cryptocurrencies have a positive 180-day correlation of 0.84.

Fortunately for Cardano bulls, analysts are once again becoming optimistic about BTC.

As reported by Bitcoinist, Glassnode CTO Rafael Schultze Kraft observed that Bitcoin’s on-chain trends are stronger than they have been in months. He observed that the number of hourly new BTC addresses reached a two-year high while the hourly count of transactions reached a 10-month high.

There’s also the simple fact that more than 62% of all BTC hasn’t moved in a year. 

“Bitcoin 1yr HODL new ATH!! We have reached a new all-time high, with 62% of bitcoin not moving on-chain for at least 1 year. Strong hands from hodl’ers! Such high levels of HODL’ing have been present at the start of previous Bitcoin bull runs,” on-chain analyst Philip Swift recently wrote in regards to the image below.

Bitcoin

Bitcoin 1 year+ HODL Wave indicator from on-chain analyst Philip Swift (@PositiveCrypto on Twitter)

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Cardano (ADA) Is Forming the Signal That Preceded a 75% Bear Market: Analyst

Bitcoin Flashes Same “Consolidation” Fractal That Sent Its Price to $20K

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Bitcoin Flashes Same “Consolidation” Fractal That Sent Its Price to $20K


  • Bitcoin price is trending inside a lengthy consolidation pattern after rallying by up to 170 percent in the second quarter.
  • As calls for a breakdown move grow, independent market analysis firm TradingShot has released a bullish outlook for the cryptocurrency.
  • It expects the BTC/USD exchange rate to break bullish, citing two eerily similar fractals that resulted in explosive price rallies.

Bitcoin may have enough fuel left to resume its much-awaited bull run even as it trades inside an overstretched consolidation range. So sees an independent market analysis portal.

TradingShot said on in its Thursday analysis that the BTC/USD exchange rate could head higher in the coming sessions. The portal reached an optimistic conclusion after pitting the pair’s ongoing weekly trend behavior with the ones logged during the 2011-2013 and 2014-2017 bull cycles.

Triangle Consolidation, Golden Cross

A chart published by TradingShot’s analysts highlighted near-perfect similarities between the current and old price trends. The most accurate among them was Bitcoin’s tendency to consolidate near a 0.5 Fibonacci line and to undergo a bullish breakout after a crossover between its 100 and 200-weekly moving averages.

For instance, the end of ‘Cycle 1’ in the chart follows Bitcoin’s test of its 100-WMA (black wave) as support. The price later consolidates until the Fib 2 time extension level (the orange vertical line). Meanwhile, the consolidation pattern appears to make a Triangle with a support level near the 0.5 Fib line holding the bullish bias.

Then by the time the 100-WMA crosses above the 200-WMA, Bitcoin breaks to the upside and undergoes a parabolic bull run towards its all-time high near $20,000.

The ‘Cycle 2’, meanwhile, sees Bitcoin crashing towards $3,200 in December 2018. The price again reaches the 100-WMA. It consolidates above the 0.5 Fib line until the COVID-induced sell-off of March 2020 sends it back below the support. Nevertheless,  Bitcoin retains the level as its support all over again.

“We are currently on the way to reach the Fib 2 time extension level (orange vertical again),” wrote TradingShot. “[It is] where the price consolidated during the previous cycle.”

The portal noted a similar Triangle formation as Bitcoin consolidated sideways, further indicating the cryptocurrency’s 100- and 200-WMAs attempting to crossover. It added:

“Does this mean we are still going through a lengthy (Triangle) consolidation around the 0.5 Fibonacci retracement level that will start breaking upwards? Very possible based on that model.”

Don’t Expect an 8,000% Bitcoin Rally

TradingShot’s analysts reminded that traders should not expect an explosive rally out of the next breakout.

There will be diminishing returns, they confirmed, adding that lengthening cycles tend to become less volatile over the years.

Bitcoin Spots Errors in US Jobs Report Way Ahead of Wall Street

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Bitcoin Spots Errors in US Jobs Report Way Ahead of Wall Street


  • Bitcoin closed its Thursday trading session in red even as an optimistic June employment report boosted risk-on sentiment.
  • The cryptocurrency’s losses contrasted gains on Wall Street, showing first signs of decoupling after weeks of strong positive correlation.
  • At the same time, the plunge showed Bitcoin second-guessing the US economy’s recovery amid rising COVID cases.

Did Bitcoin spot a significant error in an otherwise positive US jobs report? Apparently, yes.

The benchmark cryptocurrency plunged by a modest 1.61 percent to circa $9,091 at the Thursday session close. The dull finish surfaced despite favorable risk-on sentiments led by the news that the US added 4.8 million jobs to its economy in June. On the other hand, stocks rallied.

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Bitcoin price chart showing its latest decoupling from the S&P 500. Source: TradingView.com

The event showed the first signs of decoupling between Bitcoin and the S&P 500 after weeks of strong positive correlation. Stock investors favored the optimistic data against the grim outlook raised the rising number of COVID infection rates. Meanwhile, Bitcoin traders remained cautious.

US Jobs Recovery Uncertain

Part of the reason why the top cryptocurrency did not tail the S&P 500 on Wednesday also points to underlying troubles with the US jobs data. Indeed, the report showed the unemployment rate ticking down from 13.3 percent in May to 11.1 percent. But, it did not address the rising number of permanently unemployed workers.

The Conference Board, a New York-based nonprofit, sheds more light on the matter. In a press release published Thursday, the organization stated that more than 1.4 million Americans filed for unemployment benefits last week. It also accused the Department of Labor of misclassifying jobs, noting that the actual jobless rate is around 12.3 percent, not 11.1 percent.

“On top of that, the large government stimulus – especially the unemployment benefits it provides – will mostly end in the coming month, and its future is uncertain,” the Conference Board added.

It does not mean that every Bitcoin trader assessed the US jobs data and decided to sell the news. But the cryptocurrency’s plunge against the S&P 500’s jump showed that some traders spotted the said error before the Wall Street. Or, in simple terms, they just got bored of the cryptocurrency’s flat trend and sold it at the local top.

What’s Ahead of Bitcoin

As the US market goes on a long weekend holiday to celebrate the independence day, Bitcoin stands pretty much on its own until Sunday evening.

Traders may keep watching the number of COVID cases as their cues to understand the next stock market phase. The S&P 500 may pare some of its gains on Monday on profit-taking sentiment, leaving Bitcoin either flat or depressive.

It all narrows down to technicals in absence of major fundamental drivers. Josh Rager, a cryptocurrency market analyst, said on Friday that Bitcoin would anyway benefit regardless of its bearish/bullish/sideways bias.

“If it breaks up, price likely ranges over $10k+ for a while – after being held below $10k for so long,” he tweeted. “If price breaks down, it will give more time to accumulate in 4-digit territory.”

Bitcoin was trading 0.03 percent higher at $9,093 at the time of this writing.

Bitcoin Indicator That Predicted March’s 60% Drop Is Bearish Again

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Bitcoin Indicator That Predicted March’s 60% Drop Is Bearish Again


Bitcoin is seemingly stuck in no man’s land.

As this outlet has covered extensively, the cryptocurrency has been caught between a crucial support and a crucial resistance; every time BTC attempts to break past $8,500 or $10,000, it is rejected.

There is a growing sentiment that down will be the direction that Bitcoin eventually breaks, though, with new analyses.

There Are Multiple Similarities Between Bitcoin in March and Now

According to one trader, there’s a growing chance Bitcoin corrects rather than rallies in the months ahead.

He shared the chart below on July 2nd, showing that per the one-day Ichimoku Cloud, Bitcoin has a “bearish future” ahead of itself. While he didn’t explicitly state it, the chart indicates that per the Ichimoku Cloud, Bitcoin is looking rather similar to how it looked prior to March’s crash from the $9,000-10,000s to $3,700.

Image

The bearish state of the Ichimoku Cloud isn’t the only similarity analysts have observed between March’s highs and now.

A cryptocurrency technician shared the image below two weeks ago. It shows Bitcoin’s price action over the past 18 months along with the width of the Bollinger Bands. The Bollinger Bands is a technical analysis tool often used to show volatility in markets.

The last time the width of the bands were this low, according to the chart, was prior to March’s crash.

Bitcoin

Bitcoin price chart over the past one and a half years with volatility indicator (Bollinger Band Width). Chart from TradingView.com; shared by Byzantine General (@Byzgeneral on Twitter).

Also, just like in February and March, institutional traders are building a net short position on Bitcoin via the CME’s futures.

The same trader recently shared data from the CME’s Commitment of Traders report. The report is released weekly and shows the cumulative sentiment of a futures market.

The data shows that institutional traders now hold more than 2,000 CME futures contracts short on Bitcoin. Such a negative sentiment from this group of investors was last seen prior to the March capitulation to $3,700.

A Different Macro Setup

What these technicals and trends ignore, however, is the dramatically different macro context now and back then. Fundamentally speaking, analysts say that Bitcoin is more bullish than ever before.

BlockTower Capital released a May report indicating that the “macro case for Bitcoin has never been more obvious.” Core to their sentiment is the existence of flaring geopolitical tensions, the pandemic causing the world to go digital, and small emerging markets collapsing.

As reported by Bitcoinist previously, Nexo’s Antoni Trenchev said that due to the convergence of fiat money printing and Bitcoin’s halvings, BTC is set to hit $50,000.

“So yes, I’m sticking to my prediction of 50K until the end of the year. I appreciate that it is a bold statement, but the fundamentals are there and the momentum is shifting there as well,” Trenchev concluded to the Bloomberg journalist.

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Bitcoin Indicator That Predicted March's 60% Drop Is Bearish Again