Bitcoin (BTC) begins the week strongly, having surged past $30,000 in recent days.
The price of BTC has been meeting the hopes of the bulls after a prolonged period of sideways trading that gave little comfort. Can the trend keep going?
The thought that is occupying every trader this week is whether or not to hold onto $30,000 until the end of the week and beyond. However, in a highly unstable cryptocurrency market, anything is possible.
The macroeconomic environment is typical for the last week of June, providing some potential triggers for asset prices while avoiding multiple significant data releases at the same time.
The news from Russia over the weekend did not seem to have much effect on the performance of markets elsewhere, as it had already concluded prior to the beginning of the week’s trading.
It appears that a period of assessment has arrived for Bitcoin, with fundamentals likely to move away from their record highs.
Sentiment is also very changeable when it comes to $30,000, which is a key level.
Cointelegraph examines the elements which are influencing Bitcoin’s value in the short-term in its weekly overview.
Bitcoin bulls protect $30,000 at weekly close
Bitcoin declined during the latter portion of the weekend after briefly reaching $31,000.
Despite a lack of impetus, bulls were able to protect the $30,000 level during the night, and as of June 26, $30,500 had become the focus again, according to information from Cointelegraph Markets Pro and TradingView.
Last week, the BTC/USD gained a total of 15.6%, making it the third most successful weekly performance of 2023, as reported by CoinGlass, a monitoring resource.
“This week is focused on transforming the resistance zone/supply zone at $31,000 into a support,” Crypto Tony, a well-known trader, informed his Twitter followers.
He noted that both Bitcoin and Ether (ETH), the most prominent altcoin by market cap, were at a point of opposition, with the latter attempting to break through the $2,000 barrier.
He remarked that it was going to be a significant week for everyone.
Jelle, a fellow trader, concurred, forecasting that once $30,000 was taken care of, there would be new increases ahead.
Rekt Capital, a trader and analyst, declared that the broad Bitcoin price decline has ended, and remarked on the influx of funds into altcoins.
“It was observed in the weekend analysis that funds are already being directed into altcoins while Bitcoin remains steady,” the analysis noted, further noting that the overall crypto market capitalization had successfully tested support.
Michael van de Poppe, founder and CEO of trading firm Eight, was also keeping an eye on the entire crypto market, with an eye towards its potential reclaiming of the 200-week moving average.
Fed’s Powell, PCE data headline “huge” macro week
The upcoming week is likely to be shaped by two significant economic developments, particularly the U.S. data releases which will come after remarks from Jerome Powell, Chair of the Federal Reserve.
On June 28-29, Powell will be engaging in “discussions” concerning the economy, and the latest U.S. Personal Consumption Expenditures (PCE) Index figures will be released on June 30.
Powell has stated that these are the Fed’s preferred indicators for gauging inflation rates, with a positive outcome potentially influencing their decision on rate changes.
The Kobeissi Letter, a financial commentary resource, summarized on Twitter that this has been a “huge week” with the possibility of a “Fed pivot” in question.
Kobeissi suggested that the Federal Reserve might be done with its rate hike cycle for good, whereas Powell had previously implied that hikes may carry on even after remaining unaltered in June.
CME Group’s FedWatch Tool revealed that as of June 26, the probability of a rate hike in July was more than 70%.
Mining difficulty due to drop despite BTC price gains
In an interesting contrast, albeit likely to be short-lived, to the rise in BTC prices, the fundamentals of the Bitcoin network are not experiencing the same gains.
The most recent calculations from BTC.com indicate that the difficulty of the Bitcoin network is projected to go down at its next readjustment on June 29.
This will be the first decrease since early May, and is predicted to be the second greatest of 2023, at approximately -2.5%.
Despite this, the alteration is slight when compared to past trends, and Simple Mining, a mining company, commented that the combination of a rising spot price and dropping difficulty was “miners’ two favorite things.”
Meanwhile, James McAvity, the CEO of Cormint, a Texas-based Bitcoin energy company, proposed that the difficulty spike was due to local occurrences.
The hash rate, an estimated measure of the computing power devoted to mining, showed similar movements on the day as it had been decreasing from its all-time high in the preceding week, according to data from Blockchain.com.
Bitcoin RHODL Ratio points to “new breakout”
Philip Swift, a well-known analyst, believes that Bitcoin is at the beginning of a “new speculation cycle”.
In his latest research into the RHODL Ratio metric of Bitcoin, the founder of LookIntoBitcoin asserted that the supply of BTC is transitioning from being mainly held by hodlers to becoming a more speculative instrument.
Swift’s RHODL examines the actual worth of coins in certain age groups – the value when they were last transacted. The RHODL Ratio evaluates the 1-week band against the 1-2 year band.
Swift elucidates in his introduction on LookIntoBitcoin that the ratio is calibrated for both increased hodl’ing over time and for lost coins by multiplying it by the age of the market in days. He further states that when the 1-week value is notably higher than the 1-2yr value, it is a sign that the market is becoming too hot.
Although it may appear complicated on paper, the RHODL Ratio serves as a helpful instrument for Bitcoin price cycles, and is currently exhibiting the classic behavior that is typically seen at the beginning of bull markets.
By the end of 2022, while the property of long-term hodlers remains, opportunistic traders have begun to enter the market again, suggesting a transition to more widespread trading activity.
“Swift remarked that, with the influx of fresh players to the market and younger coins having greater worth, the RHODL Ratio appears ready for a fresh surge,”
Sentiment could “swing the other way”
Crypto market sentiment appears to be greatly impacted by the prospects of Bitcoin reaching a price of $30,000.
A trader claims that Bitcoin’s “parabolic advance” will lead to an all-time high price by 2023.
The Crypto Fear & Greed Index, which gauges the sentiment of the market, has seen much variation in recent days as BTC/USD attempts to establish a new floor.
The Index has dropped 10 points from its high of 65/100 on June 22, indicating a trend toward “neutral” territory as spot price momentum begins to decline.
Fear and Greed is a behind-the-scenes indicator that demonstrates how reactive the market is to the present price movements – not only for Bitcoin but also for Ethereum, which is trying to reach the $2,000 mark as a support.
Popular trader cautioned against buying until more clear indicators were present, based on sentiment data.
He stated that sentiment could be about to turn in the opposite direction.
Gary Gensler’s employment is in jeopardy, BlackRock’s initial Bitcoin ETF and other news: Hodler’s Digest, June 11-17.
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