BTC miners “finally capitulate” – 5 things to know in Bitcoin this week
Bitcoin (BTC) starts a new week approaching key resistance as the shock of the latest inflation data in the US passes – can the strength continue?
The weekly closing on July 17 may have been virtually identical to the last one, but BTC / USD shows some much-needed strength before the Wall Street opening on July 18.
Last week was a test time for crypto-holders everywhere, with inflation dictating the mood across risk assets and the US dollar covering the gloomy atmosphere. With the pressure now easing – at least temporarily – the mood has room to relax.
At the same time, data on the chain suggests that now is a make or break moment for Bitcoin miners, and capitulation across the market feels close.
As the conversation about where Bitcoin’s macro bottom can lie continues, Cointelegraph takes a look at several factors that will shape the BTC price performance in the coming days.
All eyes focused on weekly moving averages
Those who look at the weekly chart on BTC will have a sense of deja vu this time – BTC / USD ended July 17 below $ 100 away from where it was July 10.
The last weekly closing is something of a disappointment in itself, with Bitcoin erasing last-minute winnings to print a “red” light in the last seven days.
What happened afterwards, on the other hand, had the opposite tone – a rapid overnight march higher, with the largest cryptocurrency adding $ 1,400 in less than twelve hours.
This all leads to a known challenge on intraday time frames – BTC / USD is approaching both $ 22,000 and a key trend line of $ 22,600 in the form of the 200-week moving average (WMA).
Previously served as support in bear markets, 200 WMA has actually turned into resistance this time, after being lost in mid-June and never recovered.
As such, analysts see this level as a key area of interest if bulls are to be able to maintain upside pressure.
For PlanB, the creator of the Stock-to-Flow family of BTC pricing models, a factor beyond the spot price, meanwhile, reinforces its significance. As in previous bear markets, 200 WMA fell short of Bitcoin’s realized price this year, giving a classic market reversal signal.
Realized price refers to the average price at which all existing bitcoins were last moved.
“In the bear market in 2014/15 and 2018/19 (blue), the realized price was above 200WMA and the beef market did not start until the realized price and 200WMA touched,” PlanB told Twitter followers July 17 along with an accompanying chart.
“Now realized price and 200WMA has already reached $ 22K. For the next beef market, we need BTC above realized price and 200WMA.”
As the Cointelegraph reported, it looks like Bulls need to play a moving average game over longer time frames as well. In addition to 200 WMA, 50-week and 100-week exponential moving averages (EMAs) are also included in the forecasts.
50 EMA is currently at $ 36,000 and 100 EMA at just over $ 34,300, according to data from Cointelegraph Markets Pro and TradingView.
Ethereum is approaching $ 1,500 in potentially trend-setting moves
A catalyst that could take Bitcoin above its main resistance mark of $ 22,600 could come from an unlikely source – altcoins.
While movements on Bitcoin normally see other cryptocurrencies before copycat moves up or down, some are waiting this week to see if BTC / USD will follow largest altcoin Ether (ETH) higher.
Amid the news that the transition to Proof-of-Stake (PoS) mining operations may soon be completed, Ethereum has surpassed in terms of price gains in recent days, and is up 25% in just the last week.
At the time of writing, the ETH / USD was challenging $ 1500 for the first time since June 12.
“$ eth took back its 200 week moving average this week, btc will probably next week, the time to be bearish has defo to an end imo,” the popular Twitter account Bluntz summarized on the day.
Co-commentator Light also believed that Ethereum’s strength should keep the upward pressure on Bitcoin, and noted liquidations among the traders who ignore the ETH movements and continue to be short BTC.
shorts had days to get out on BTC. 0 reason to be brief when ETH did what it did.
A large asset in the ecosystem that tears 40% of the logs risks seeking behavior everywhere else. It makes people consider that assets can actually go up in price. This leads to catch-up / rotational currents. https://t.co/nae0WIys9M
– light (@lightcrypto) July 18, 2022
Cross-crypto card liquidations within 24 hours into July 18 amounted to around 132 million dollars, confirms data from the chain monitoring resource Coinglass.
Going forward, however, not everyone is convinced that Ethereum will be able to break its general downward trend, with the implications obvious to other tokens as a result.
Cointelegraph contributor Michaël van de Poppe claimed that the draw for this weekend’s CME futures gap on Bitcoin could provide a downside to puncture optimism.
CME futures ended its previous trading day, July 15, at around $ 21,200.
“With the potential for a CME gap below us (and Bitcoin swimming around the previous CME gap), I will not be surprised by a false move and retest lower for $ ETH,” he wrote in a Update.
“Want to get into the longs around the $ 1250-1280 region.”
The dollar strength eventually turns in Bitcoin’s favor
When it comes to macro movements, the landscape as a whole looks less frenetic than what crypto investors encountered last week.
Inflation data has come and gone, and the debate about whether inflation has reached its peak or not in the US is thus cooling until the next consumer price index (CPI) in August.
The Federal Reserve will decide how to deal with inflation in terms of policy rate hikes later this month, but the Federal Open Markets Committee (FOMC) will still not meet until July 26.
Any macro signals when it comes to BTC price action will therefore come from other areas, with geopolitical triggers high on the list of potential factors.
Asian markets were stronger when the week started thanks to a modest rise in Chinese technology stocks previously hammered by coronavirus nerves.
At the same time, the US dollar, the star in recent weeks when stocks around the world felt pressure, began to consolidate their gains.
The US dollar index (DXY), which has long been inversely correlated with the performance of cryptocurrencies, set the price south below 108 on the day, after reaching new highs in two decades last week.
“Finally, we see a decline in the daily,” Twitter analyst IncomeSharks commentedand highlights the potential for DXY to test a trend line from May.
“Even a fall in this trend line would be big for stocks and crypto. Will fit perfectly with a bullish week before the Fed meeting.”
Co-account Rickus also felt that Bitcoin would not “collapse again” despite the fact that a withdrawal is still possible – thanks to the DXY comdown and a stronger finish for the S&P 500.
SPX had a good finish before the weekend, DXY also looks a bit weak on ltf while BTC is close to resistance levels..Lines I look at..I personally do not think we will break again even if I look for a pullback. pic.twitter.com/KcYRJFrrbS
– Rickus (@rickus_trades) July 17, 2022
“Should allow room this week for stocks and crypto to bounce until they find close support,” 0xWyckoff, creator of the crypto trading resource Rekt Academy, added in part of a thread about DXY.
In a separate observation Meanwhile, Dan Tapiero, CEO and CEO of 10T Holdings, noted that a macro-high USD against the Chinese yuan should mark a turning point for BTC.
“The last 3 major BTC highs in 2014, 2018, 2021 roughly coincided with highs in Chinese RMB / lows in USD,” he noted in part of a tweet on July 18.
“Suggests that the dollar peak will soon support BTC lows.”
Miners dump 14,000 BTC in days
With so much hope that a trend reversal may be in the offing, chain data showing Bitcoin miners selling inventory looks all the more bleak.
According to data from the chain analysis platform CryptoQuant, as of July 14, miners removed a significant portion of BTC from their reserves.
The effect was that mining reserves fell to the lowest levels since July 2021, a point that also marked a low BTC price.
Reserves were 1.84 million BTC on July 18, down 14,000 BTC compared to July 14.
For CryptoQuant contributor Edris, the numbers were an encouraging sign, suggesting that miners were now helping to establish a macro-BTC price floor.
“Bitcoin miners are finally capitulating,” he said summarized over the weekend.
“The BTC price has consolidated at the $ 20K level in recent weeks, making investors wonder if an accumulation or distribution phase is underway. Looking at the Miners’ Reserve chart, that seems to be the case. . »
Macroanalyst Alex Krueger, meanwhile described June’s miners’ sales as a “clear sign of capitulation,” adding that miners “tend to gather on the way up and then vomit when things go awry.”
RSI sparks “very rare” BTC price inflection point
Finally, a “rare” event on the Bitcoin chart may have only provided the fuel for a historic turnaround, analysis suggests.
Related: Top 5 cryptocurrencies to see this week: BTC, ETH, MATIC, FTT, ETC
By taking the BTC / USD chart from the beginning of Bitcoin’s lifetime, Stockmoney Lizards noted that Bitcoin’s relative strength index (RSI) is now at suitably low levels and has combined with a hint of a log chart trendline that triggered the biggest BTC price gains.
“Current exciting and very rare situation now,” it said announced in the weekend.
“RSI below 45 and logarithmic bottom showed a big reversal earlier, followed by an insane bull run. Cross = RSI <45 + log. Bottom."
An accompanying chart showed the strength of such an event, which follows that the RSI hits its lowest levels ever.
For CoinPicks analyst Johnny Szerdi, meanwhile, Bitcoin had to break the 50 mark on the RSI, a key resistance zone in recent months, to avoid the risk of a new sale.
GM! #Bitcoin is at a critical point. It has not managed to break 50 RSI since 3/14. It was rejected from it 5 times since 20/4. Notice the vertical lines to where it corresponds to the large sales. With volume, if we reject here for the sixth time, it could mean a new sale. pic.twitter.com/znZNpfJ3K8
– Johnny Szerdi (@johnnyszerdi) July 17, 2022
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