5 things to watch for Bitcoin this week

Bitcoin (Bitcoin) Enter the new week with moderate price movements and optimistic fundamentals-what will happen in the next few days?

Still holding the support of $30,000, Bitcoin hardly really excites traders, but the volatility has reminded them of its existence in the past week.

As the mining industry continues to recover, when it comes to the Bitcoin bull market in 2021, everyone is playing a “wait and see” game.

Cointelegraph studied five things that may provide some direction for BTC price movements in the short term.

As the stock market calmly rises, the dollar is bullish

This is the classic summer picture of the stock market-it fell slightly last week, but it has been rising, but Covid-19, inflation and other triggers have caused caution.

However, this time of year is known for a lack of action, and even the most recent changes are almost absent on a broader scale.

Lori Calvasina, head of U.S. equity strategy at Royal Bank of Canada Capital Markets, wrote in a report: “Covid background is just one of several factors that may adversely affect reinflation trading.” lead Bloomberg.

The U.S. dollar strengthened amid the mild volatility in the stock market, and the U.S. dollar currency index (DXY) climbed to 93.

As Cointelegraph Report, The negative correlation between DXY and Bitcoin is still the focus of some people’s attention-the short-term peak of the index may correspond to the price pressure of BTC/USD.

In the context of the easing of tensions among OPEC+ member countries and the new production increase agreement, another focus is on oil. Although traditionally has a small impact on Bitcoin’s behavior, any unexpected fluctuations can provide impetus for the low-volume cryptocurrency market.

This was witnessed last week because of reports that Bank of America gave the green light to specific customers’ bitcoin futures trading, quickly pushing BTC/USD up by $1,000.

The actions of another bank this week, the Fed, may be more important.The stablecoin working group will attract the attention of Treasury Secretary Janet Yellen when it is established convene The goal is to “work within the organization”.

Weekly candles increase the risk of falling $29,000

In the spot market, Monday started with hope for the future rather than confidence in current price events.

Seeing a see-saw of BTC/USD over the weekend, it is still unable to break through the resistance level of 32,000 USD or higher, but it is also easy to avoid testing the support level of 31,000 USD.

At the time of writing, $31,750 has formed a focus on the lower time frame, and its interval steadily constitutes the defining characteristic of the hourly chart.

BTC/USD 1-hour candlestick chart (Bitstamp). Source: TradingView

“It’s time for Bitcoin to go green for a week,” popular trader Michaël van de Poppe adventure.

Talking about whether and when the Bitcoin price may bottom out is still a major topic. As Cointelegraph pointed out on Sunday, the $64,500 retracement from the recent all-time high has now lasted for three months- The second longest ever In the bull market cycle.

As public opinion supports returns of less than $30,000, Van de Poppe believes that the bottom may not be as sharp as expected.

“Bottoms usually don’t look good because most people expect the market to go down further,” he said tell Twitter fans.

“A bad weekly candle does not necessarily mean that prices will fall further.”

That candle is really disappointing. The weekly closing price of BTC/USD on Sunday is its Lowest in 2021 So far.

For traders and analysts Rekt Capital, the ability to recover $32,000 is a problem in itself, which opens the way for reaching a level of around $29,000.

“Bitcoin may lose weekly support (approximately $32,000). Today is the last day for $BTC to reclaim this support,” he caveat Sunday along with the attached chart.

“Without it, there is almost no higher time frame support to prevent BTC from revisiting the green area again.”

BTC/USD scenario with support and resistance areas.Source: Rekt Capital/Twitter

Difficulty exceeds expectations

Contrary to price, Bitcoin’s network fundamentals continue to strengthen after unprecedented events in May and June.

The internet Hash rateStill staying above its local low of 83 exahash/s (EH/s), as the miners moved out of China, no further major setbacks were seen.

However, the real signs of progress come from difficulties.

This weekend auto-adjust The difficulty dropped slightly by 4.8%-a pleasant contrast with previous estimates. Two weeks ago, the difficulty is expected to be reduced by nearly 29% than ever before, which is slowly improving during the two-week difficulty cycle.

Now, Bitcoin is expected to undergo its first positive adjustment since the price crash in May.

These changes demonstrate that Bitcoin has firm self-monitoring capabilities and incentivize miners to return to the network while continuing to process transactions unhindered.

Therefore, commentators believe that the worst moment of the recent turmoil has passed.

Kevin Zhang, vice president of Foundry Services, a mining consulting subsidiary of Digital Currency Group, said: “After this adjustment, the sequelae of China’s crackdown on the downward adjustment of difficulty should be over.” Say In the weekend.

“I look forward to seeing the hash rate and difficulty slowly recover from here.”

Bitcoin difficulty chart.Source: Blockchain

At the same time, the hash rate and difficulty are both lower than the level when the block subsidy was halved in May 2020.

Fund interest rates remain calm

The on-chain indicator is by no means bearish, but it is a continuous subtle signal that has attracted much attention this week.

Specifically, Funding rate In the recent price fluctuations, various exchanges have remained neutral or slightly negative-this is a hopeful insight into the mentality of traders.

As Cointelegraph Report, The large whales alone seem to tend to sell at current levels, while other investor profiles buy the supply instead.

However, in terms of transaction volume, $30,000 of Bitcoin is predictably uninteresting. Both futures and PayPal transaction volumes have fallen sharply, with the former returning to the level at the end of last year.

Crypto futures open interest and trading volume chart. Source: Bybt

The infamous Bitfinex shorts “relax”

The price trend over the weekend is accompany Through bets that fluctuate among large investors.

Bitfinex’s short position, driver As witnessed in the past few weeks, short-term volatility has fluctuated with ups and downs.

On Monday, short positions were further reduced as the market awaited clues on the overall direction.

BTC/USD short 1-day candlestick chart (Bitfinex). Source: TradingView