5 things to watch for Bitcoin this week

Bitcoin (Bitcoin) Is at a crossroads at the beginning of a new week-hovering around $40,000, but severe headwinds prevented it from rebounding.

After seeing a high above $42,500 on an impressive weekend, BTC/USD fell to the $40,000 mark.

It is widely expected that there will be a reversal and consolidation-the pace of increase in the past week has made the investor community feel uneasy, and until recently they still predicted that it would fall to the $20,000 range.

Cointelegraph studied five factors that may affect the price trend of BTC in the next few days.

Bitcoin is “rageous” and the dollar is trembling

In terms of Bitcoin, stocks and the U.S. dollar continue to deviate from predicted behavior patterns.

After China targeted large technology companies at the end of last month, Bitcoin began to show a serious rebound, but stocks were delayed in making up for lost ground.

However, the US market is now rising again, while China is still nervous. As a result, the U.S. dollar is declining against other currencies, which runs counter to the forecast.

At the time of writing, the USD currency index (DXY) is trading slightly above 92, which is below the high of above 93 a week ago.

As Cointelegraph Report, Analyst Crypto Ed believes that DXY needs to reach its own local high around 94 before it can reverse downward and give Bitcoin breathing room. In the current situation, this seems difficult to achieve.

Trader and analyst Scott Melker said: “The U.S. dollar appears to be breaking below the local rising wedge.” Summarize last week.

“Stonks are raging, Bitcoin is raging.”

The dollar currency index (DXY) 1-day candlestick chart. Source: TradingView

However, outside of China, traditional markets are still facing familiar problems. In terms of long-term performance, these problems are still easy to put cats in pigeons.

“As the global coronavirus cases increase, inflation scares continue, and we enter a seasonally weak month, stocks still face the risk of short-term adjustment or volatility, but soaring US corporate profits and falling bond yields are providing support,” Shane Oliver AMP Capital Investment Strategy Director and Chief Economist stated in a report Bloomberg on Monday.

The buzzwords of Bitcoin trading over-the-counter trading

When it comes to Bitcoin price movements, this is the story of two markets this week.

The strong rebound in the past 7 days has particularly attracted the attention of a group of investors-a large number of buyers and sellers in the over-the-counter (OTC) market.

Although the retail industry has also rebounded, it is these larger players On the radar Analyst.

As the BTC balance on exchanges began to drop sharply, people began to speculate that institutional entities were buying spare bitcoin supplies in large quantities.

At the same time, some veterans appeared to sell off lay down To “do not believe”, but this is still the crux of further price increases.

However, as the weekend draws to a close, over-the-counter trading activities have also begun to proceed with caution. Data from major derivatives platforms (especially FTX) show that there are more and more bets on falling prices. This is the popular trader Pentoshi Suggest Can be linked to a Cryptocurrency tax bill This may be approved by US lawmakers this week.

At the same time, more data shows how likely the over-the-counter market is to participate in the overall market.

“The BTC worth 131B USD moved yesterday, but only 1% came from exchange deposits/withdrawals. The liquidity ratio of all exchanges hit a 2-year low,” the on-chain analysis service CryptoQuant famous on Monday.

“This may indicate that big players are making $BTC OTC transactions.”

Chart of the ratio of funds flow to all Bitcoin exchanges. Source: CryptoQuant

Accelerate the pace of computing power and difficulty

Despite the changes in trading habits, Bitcoin is by no means doom and pessimism.

The latest data shows that the basic indicators of the management network overwhelmingly support the continuation of the bullish trend.

This difficultyIt can be said that the main regulator of the network has seen a positive adjustment for the first time since the price collapse in May this weekend-up 6%, and is expected to rise further in 11 days.

This is no easy task-as players settle overseas or increase existing non-Chinese businesses, the huge turmoil among miners caused by China is now fading.

Bitcoin difficulty chart.Source: Blockchain

This is even more obvious in the hash rate, according to Best estimate It briefly rebounded to over 100 exahash (EH/s) per second over the weekend.

“Surprisingly, Bitcoin’s hash rate has just experienced the biggest drop in history, and the price has risen by 40% in 10 days,” asset manager Travis Kling reacted In the weekend.

“The anti-fragility is awesome. There has never been such a thing in the world. It is an honor to participate in it.”

At its peak, the hash rate reached 168 EH/s, and then dropped to a low of 83 EH/s in China. The 50% drop roughly corresponds to BTC/USD, which fell from a historical high of $64,500 to $29,300.

GBTC finally escaped FUD

In addition to the Chinese narrative, another key topic that seems to be waning in importance is Bitcoin’s mini-bear market-Grayscale Bitcoin Trust (GBTC) stock unlocking.

Although it is questionable as a market force at best, these unlocks have even caused a commotion among mainstream financial entities, who believe they will further depress the price of BTC.

This turned out to be a Non-starter, With the unlocking coming to an end, GBTC itself is increasing its real-time market appeal.

This is evident in the trend that the premium of the fund tends to zero from the maximum value of -15.5%. Over the weekend, since the latest data is not yet available, the premium is about -6%.

“The last batch of GBTC unlocks has been cleared, causing the GBTC premium to rise sharply from the 15.5% discount on July 15 to only a 6.67% discount. This may indicate that investors are confident in the recent recovery of BTC,” Delphi Digital, a research company , Consulting and investment companies, debate then.

Grayscale saw its two funds Become available Through last week’s US$25 billion robotic advisor Wealthfront, the high-profile buy continue.

GBTC premium chart. Source: Bybt

There is no room for greed… However

According to an indicator’s assessment, a slight cooling from a local high of more than US$42,000 actually has a therapeutic effect on market sentiment.

related: As illiquid supply hits a record high, Bitcoin “super cycle” hits the highest point of BTC price in the fourth quarter

according to Crypto Fear and Greed Index, Considering a variety of factors when measuring the sentiment of the cryptocurrency market, falling below $40,000 has eroded “greed”.

On Monday, the index was 48/100-the “neutral” zone-and on Sunday it was 60, which is “greedy.”

At the same time, 40,000 US dollars will never be lost, BTC/USD fluctuates around this level, and at the same time try our best to flip it to a solid support level. Therefore, the price trend of BTC has room for growth without affecting sentiment, so that the possibility of selling is very high.

In contrast, just a week ago, fear and greed languished in the “extreme greed” zone, and saw a huge shift as Bitcoin rose and exited the $30,000 zone.

Crypto Fear and Greed Index. Source: Alternative.me

“Wow, the Bitcoin Fear and Greed Index has significantly recovered from its heavy low after the sharp drop. There has been a lot of greedy demand in the market, and volatility has rebounded recently,” Vince Price, a trader, investor and analyst (Vince Price) Comment One of many surprising reactions to these changes.

“Good news for BTC!”