Bitcoin consolidates right below Fib level that triggered 2013 all-time highs

November 7, 2021 Coin Telegraph

Bitcoin

Technical data contrasts with sideways price action as analyst warns not to sell BTC at $62,000.

Bitcoin (BTC) continued to track sideways on Nov. 7 amid warnings that now is "not the time" to sell BTC.

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

"Not the time to be selling"

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD lingering near $62,000 throughout Sunday.

The pair had continued a flat period over the weekend, as market participants waited for signs of volatility up or down.

While impatience was palpable as the week drew to close, words of caution came from those eyeing longer timeframes and historical price patterns.

"What goes on during a sideways period for BTC like now? Buyers & sellers are exchanging coins with each other. Buyers buy a bit. Sellers sell a bit," Rekt Capital summarized to Twitter followers.

"But if you think about where $BTC will go over the next months: You realise now is not the time to be selling."

Others eyed the weekly close for signs of bullishness. For fellow popular Twitter account TechDev, a two-week close over a key Fibonacci level would mean BTC/USD was echoing its progress fro

"Closing a 2-week candle above the 1.618 is what fully sent 2013. Consolidating right below now," he noted Saturday.

At the same time, the price-performance between 2017 and 2021 remains uncannily similar — firmly placing this year within historical norms, as Cointelegraph reported.

*BTC/USD comparison. Source: TechDev/ Twitter*

Price highs meet lows in attention

Looking beyond immediate market behavior, the mood remained undeniably bullish — not only on Bitcoin, but Ether (ETH), Solana (SOL), and altcoins more broadly.

Amid continued sky-high price predictions, ETH/USD continued to build on recent all-time highs, while others in the top ten cryptocurrencies by market cap retained record peak levels.

BTC is going to pump,

ETH is going to pump,

your shitcoin is probably going to pump.

Be happy.
— Galaxy (@galaxyBTC) November 6, 2021

Only consumer interest, as before, lagged behind market momentum. Data from Google Trends for "Bitcoin" highlighted the lack of activity related to price action.

*Google search activity for "Bitcoin." Source: Google Trends*

Bitcoin steals $47K from bears as critical BTC price resistance crumbles

September 15, 2021 Coin Telegraph

Bitcoin

Sellers are now lying in wait above $49,000 as bulls avoid another tumble towards support at $43,000.

Bitcoin (BTC) tentatively reclaimed $47,000 on Sept. 15 in a move which analysts believe should open up the path to $50,000.

Bitcoin bulls escape another retest of lows

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD holding the $47,000 mark Wednesday, this being crucial to flip for bullish continuation.

The level had seen fierce defense by whales the day before, but bulls ultimately won the upper hand, lifting Bitcoin out of a multi-day descending channel.

Even a dip towards $46,000 failed to materialize, reinforcing the more optimistic case for short-term BTC price action.

There's the 4HR candle close for #BTC

If a dip occurs to ~$46100 from this point, it will likely be a retest opportunity to confirm a breakout from $BTC's current market structure#Crypto #Bitcoin https://t.co/H8M59ihgLm pic.twitter.com/gveXn8v3Oh
— Rekt Capital (@rektcapital) September 14, 2021

The relative strength follows a golden cross event on BTC/USD, amid record low exchange balances and an implied supply squeeze.

*Bitcoin exchange balance chart. Source: CryptoQuant*

This was all the more apparent from the daily chart, which as popular trader Pentoshi noted produced a "bullish engulfing" candle which wiped out six days of sideways action.

"Back above the 200DMA, now facing a bit of resistance at Monday's high/September's Monthly open ($47K-$47,150)," analyst William Clemente added.

"If those levels are indeed broken, could see a pretty swift move up to August's high at $50.5K."

Support echoes minimum monthly close predictions

A look at the buy and sell levels on major exchange Binance confirmed that resistance now lay higher up at just above $49,000, with clear support likewise several thousand dollars below spot price.

Support lines up with existing predictions for the minimum monthly close in September, this being $43,000. October, by contrast, demands a minimum $63,000 monthly close, close to a new all-time high for Bitcoin.

*BTC/USD buy/ sell levels (Binance) as of Sept. 15. Source: Material Indicators*

BTC becomes legal tender in El Salvador: 5 things to watch in Bitcoin this week

September 6, 2021 Coin Telegraph

5 things

It's a bullish leap of faith as Monday begins with Bitcoin above $51,000 resistance and set to become an official national currency for the first time ever.

Bitcoin (BTC) starts a new week in a new price range above $51,000 — has it beaten crucial resistance?

After the weekend turned from sideways to surge for BTC price action, bulls are now targeting $54,000 and higher.

Given how difficult it has been to hold $50,000 for any length of time over the past month — let alone beat out the sellers at $51,000 and higher — anything could happen in the coming hours and days.

With everything to play for, Cointelegraph takes a look at five factors worth considering when deciding on where Bitcoin may go next.

Have $51,000 sellers been beaten?

It’s been variously referred to as “crucial” and the “final hurdle” by analysts — now, Bitcoin has passed $51,000.

The move was a long time coming — multiple attempts to crack $50,000, a psychological barrier in itself, all ultimately failed to flip it to support. The volume of sellers above the range proved simply too much for bulls, who previously suffered a lack of momentum to sustain higher levels.

The night from Sunday to Monday changed the paradigm, however, and BTC/USD finally passed $51,000 for the first time since mid May. The question now is “can it hold?”

For some, the answer is obvious.

“Targeting $54K,” analyst William Clemente summarized just before the real momentum took hold overnight, Cointelegraph contributor Michaël van de Poppe described a $51,000+ BTC as “great.”

In the event, BTC/USD hit highs of just under $52,000 before cooling and consolidating near that peak.

*BTC/USD buy and sell levels (Binance) as of Sep. 5. Source: Material Indictors/ Twitter*

This places the pair at the very top of the resistance wall, with only $52,000 remaining as a meaningful hurdle before much easier conditions for bulls return.

“There's a vol gap here which is just air. Thus price could move quickly,” an excited Pentoshi added analyzing the current spot price setup.

“Price is also above the PoC. Buyers in control.”

Pentoshi previously argued that $50,000 in fact had little sway as a technical landmark. $48,700, he said on Saturday, was important to hold as a daily close in order to secure further upside.

*BTC/USD 1-day candle chart (Bitstamp). Source: TradingView*

El Salvador adopts Bitcoin

A less technical but equally symbolic move is due for Bitcoin this week — it will become legal tender of a sovereign state for the first time in history.

On Sep. 7, El Salvador will officially begin using Bitcoin as its national currency alongside the U.S. dollar.

Despite heavy warnings and even demands to abort the move from the likes of the International Monetary Fund (IMF) and others, the country’s president, Nayib Bukele, has held firm. Now, Bitcoin and its adoption will begin a major new experiment.

“As El Salvador takes a massive technological jump into the financial future, before any other country, there are bound to be mishaps,” Alex Gladstein, chief strategy officer at the Human Rights Foundation, said in a series of tweets about the topic.

Gladstein cited political moves by Bukele’s government among other problems which make Bitcoin adoption an interesting chapter in the country’s history. On a personal basis, however, the benefits for any El Salvadorean remain obvious.

“For Salvadorans who are open-minded and willing to put in work to understand Bitcoin it could yield enormous fruits,” he added.

Meanwhile, a movement currently gathering steam on social media involves Brazil, where the Bitcoin community plans to each buy $30 of BTC in support of the law.

El Salavdor’s government passed a motion to create a $150 million Bitcoin fund last week.

Bitcoin on track to seal fourth straight difficulty gain

Bitcoin price action continues to be supported by fundamentals which refuse to give up the pace of gains.

In just under two days’ time, the next automated readjustment will add an estimated 2.5% to Bitcoin’s difficulty, marking a fourth consecutive increase.

As Cointelegraph reported last week, this will be the first such occurrence since February, the period in which Bitcoin cracked $50,000 for the first time.

An essential indicator of miner activity and arguably Bitcoin’s most important feature, difficulty adjustments show no sign of let-up in an astonishing return to form which set in following the Chinese miner rout in May.

*Bitcoin difficulty chart. Source: Blockchain*

Alongside, the hash rate also continues to rebound, passing 130 exahashes per second (EH/s) this weekend and now just 37 EH/s below its all-time highs.

Fresh entry of hardware from relocating and newly active miners has given the hash rate a major boost — at its lows, the metric was at around half of its 2021 peak.

Stock-to-flow points to $100,000 by Christmas

A new month calls for a new update of one of Bitcoin’s most accurate price prediction models — the stock-to-flow (S2F) family.

Despite BTC/USD remaining well below the model’s technical day-by-day target, its creator, PlanB, exactly called August’s monthly close of $47,000.

With September due for a minimum close of $43,000, the analyst confirmed that a $100,000 average price later this year was still easily feasible.

“Baseline S2F forecast of $100K by Christmas still stands (or more precise: $100K average for this halving period 2020-2024),” he tweeted Sunday alongside a chart.

“On-chain (non-S2F) indicator shows no sign of a top yet (no red dots). This is in line with S2F forecast.”

With that, Bitcoin has entered the “orange” phase of the model last seen in an upward price surge in the second half of 2017. BTC price action, PlanB stated, is thus acting “like clockwork.”

“I think we go much higher than $100,000,” he added on the prognosis for the current halving cycle which ends in 2024.

*Bitcoin stock-to-flow chart. Source: PlanB/ Twitter*

Extreme greed is back

Those concerned about a Bitcoin price rally biting off more than it can chew may yet be proven right.

According to sentiment gauge the Crypto Fear & Greed Index, traders are already back in the “extreme greed” mindset.

With a score of 79/100, Fear & Greed is thus just 16 points away from its historical top zone, an area that has sparked corrective moves in the past.

In order to avoid hitting it too soon, BTC price gains need to be slow and steady, and an impulse move could therefore still prove to be unsustainable.

The Index nonetheless saw 79 in August as well, and has remained between 70 and 80 for the past four weeks.

*Crypto Fear & Greed Index. Source: Alternative.me*

Funding rates contribute to the sense of expectation with rates much lower than when BTC first breached $50,000 early this year with considerably less euphoria than in April.

In other words, traders are much more cautious this time around, if not leaning bearish as price tries to reclaim the $50K level. However, this may actually boost the chances of a short-squeeze and more upside for the price of Bitcoin in the coming days.

*Bitcoin funding rates chart. Source: Bybt*

‘Conservative’ BTC supply shock metric now says Bitcoin should cost at least $55K

September 5, 2021 Coin Telegraph

Bitcoin

The supply shock valuation model delivers an extra reason to be long-term bullish on upward price movement.

Bitcoin (BTC) should cost at least $55,000 per coin according to one metric measuring its so-called “supply shock.”

In a tweet on Sep. 5, analyst Willy Woo highlighted what he added is a “conservative” price estimate for BTC/USD.

Bitcoin price plays catch-up with metrics

While Bitcoin has still not established $50,000 as firm support, on-chain metrics have been much more firmly bullish for some time.

Now, the so-called “supply shock valuation model” has joined them, giving a conservative price estimate of $55,000.

Supply shock is simply the unavailable BTC supply divided by the available BTC supply. This goes deeper than at first glance, as Woo uses it to effectively “wave a magic wand and gauge the intent of investors before the bids and offers are even placed.”

“In this view of demand and supply, an investor who has no intention to sell is on the demand side while an investor who is willing to sell is on the supply side,” he explained in a blog post last month.

The valuation model additionally uses an algorithm to compare similar supply and demand situations to now, thus producing a fair price estimate.

“It's conservative as one of the SS metrics, exchange SS, is now above all-time-high so no look-back is possible,” Woo acknowledged in the tweet, referring to the ratio of coins in cold storage compared to on exchanges being at record levels.

The accompanying chart captures when BTC price moved with and without any shifts in investor intent.

*Bitcoin supply shock valuation model. Source: Willy Woo/ Twitter*

$50,000 first hurdle for bulls

Bitcoin supply shock is an oft-used phrase in the current market thanks to 2021 being the year after a block subsidy halving event.

With miners now unlocking just 6.25 BTC per block, so far, Bitcoin has behaved broadly similarly to previous post-halving years — 2013 and 2017.

The conservative $55,000 minimum target nonetheless remains above another set of monthly close minimums from analyst PlanB, who guesses that September will have a minimum monthly close of $43,000.

Thereafter, however, upside resumes in earnest, with Bitcoin closing out 2021 on at least $135,000.

At the time of writing, BTC/USD traded at $50,200, having stayed in a tight range throughout the weekend.

Bitcoin price sinks to $46.7K despite record accumulation and supply shock events

August 31, 2021 Coin Telegraph

Bitcoin

Everything is bullish but the price when it comes to Bitcoin on Tuesday, the market still waiting for cues.

Bitcoin (BTC) saw fresh local lows on Aug. 31 as limp price action diverged further from bullish sentiment.

Bitcoin evades bullish continuation

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reversing at $46,700 on Bitstamp after dropping $2,000 in hours.

Part of a multi-day rangebound construction, the dip resulted in a push towards $48,000, with bulls still unable to gather momentum for an attack on $50,000.

For popular trader Crypto Ed, $48,200 was the level to watch for continuation upwards.

“Showing some tricky moves, retest failed overnight with that dump,” he commented on the hourly chart.

“Right now busy to print a Bart pattern. Still having the same view: reclaim that first horizontal and we're good to go.”

*BTC/USDT annotated 1-hour candle chart (Binance). Source: Crypto Ed/ Twitter*

The mood among analysts broadly stayed optimistic on the day despite price action lagging any noticeable improvement in market activity.

Some highlighted conspicuous accumulation at current levels, while on-chain metrics such as illiquid supply were also a talking point.

“This wave of Bitcoin supply shock has the most momentum of any in recent history,” William Clemente, lead insights analyst at Blockware, noted.

“We're going much higher over the coming months.”

*Bitcoin illiquid supply relative strength index vs. BTC/USD chart. Source: William Clemente/ Twitter*

Ethereum on the move

On altcoins, Solana (SOL) and Polkadot (DOT) were the standouts in the top ten cryptocurrencies by market cap.

SOL/USD continued making new highs, gaining 19% on the day to near $120, while DOT/USD added 9.2%.

Ether (ETH) was also on the move, up 5% at the time of writing and above $3,350 in what Cointelegraph contributor Michaël van de Poppe described as a "bullish" market.

"Ethereum bouncing from support as well on the $BTC pair. Looking good," he added.

*ETH/USD 1-hour candle chart (Bitstamp). Source: TradingView*

BTC price holds $44K support in ‘great sign’ for Bitcoin bulls

August 19, 2021 Coin Telegraph

Bitcoin

Bitcoin refuses to dip to even its $42,000 February all-time highs, but familiar resistance higher up looms large.

Bitcoin (BTC) neared a critical breakout point on Aug. 19 as bulls sought to transform this week's downtrend into a battle for resistance.

Buyers and sellers close in on BTC

Data from Cointelegraph Markets Pro and TradingView tracked BTC/USD as it repassed $45,000 on Thursday, climbing to highs of $45,490 on Bits

The move came on the back of United States bank Wells Fargo revealing that it had partnered with NYDIG to launch a Bitcoin fund. It took the pair to the border of an important price point that was previously being watched for bullish continuation — $45,600.

At the time of writing, Bitcoin traded at around $45,300, having recovered from a brief dip to $43,900. For Cointelegraph contributor Michaël van de Poppe, there was relief to be had in $44,000 remaining as support.

"Bitcoin holding support here is a great sign," he summarized.

Beyond hourly timeframes, the overall resistance picture for the largest cryptocurrency remained the same. $47,000 and upwards hosted a large sell wall, one that Bitcoin has so far failed to crack.

On the support side, buyers were dug in at $40,000 and above, giving little room for maneuver for spot price under current conditions.

*BTC/USD buy and sell levels (Binance) as of Aug. 19. Source: Material Indicators/ Twitter*

Bears have little impact as metrics point higher

As Cointelegraph reported, there remain plenty of reasons to be bullish on Bitcoin, even in the short term as price action slows.

The weekly moving average convergence/ divergence (MACD), after 11 months in negative territory, finally flipped positive last week, a classic sign that an impulsive bullish move is forthcoming

Theories this week revolve around 2021 being a so-called "double bubble" year in which BTC/USD should hit a new local peak — a pattern that would mimic 2013.

Only the Grayscale Bitcoin Trust (GBTC) lags behind the trend, now at its steepest discount to spot price since the Bitcoin price dip to $29,000 beginning in May.

Bitcoin ‘golden cross’ due in days as bears draw a line at $47K BTC price

August 10, 2021 Coin Telegraph

Bitcoin

Vote day for the Senate infrastructure bill is here, while BTC price action continues to cement higher support.

Bitcoin (BTC) returned to $46,000 after a brief consolidation on Tuesday amid continued surprise at the strength of BTC’s price comeback.

3 days to Bitcoin golden cross

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hovering around the $46,000 mark o Tuesday.

The pair had spent the night ranging slightly lower, at one point testing and recovering from $45,000 support.

*BTC/USD chart with golden cross scenario. Source: Rekt Capital/Twitter*

In the absence of a larger pullback after days of significant gains, analysts were keen eyeing the approaching “golden cross” event on the daily moving average and weekly moving average convergence/divergence (MACD) BTC/USD charts.

*BTC/USD 1-week candle chart (Bitstamp) with MACD marked. Source: TradingView*

Traditionally considered to be a bullish event, a golden cross involves the rising 50-day moving average crossing above the 200-day moving average.

“The new BTC Golden Cross is only 3 days away,” trader and analyst Rekt Capital confirmed.

Turning to the four-hour chart, Rekt Capital added that Bitcoin had “confirmed” a breakout over a longer-term range.

#BTC confirmed the breakout with a 4HR Close above the Ascending Triangle

Not only that but $BTC has also successfully retested the top of its breakout structure#Crypto #Bitcoin https://t.co/VOggAPbiIO pic.twitter.com/PPRBcHmX6p
— Rekt Capital (@rektcapital) August 10, 2021

However, $47,000 still remained a crucial level to break, with sellers lined up prior to the psychologically significant $50,000 zone.

*BTC/USD buy and sell levels (Binance) as of Aug. 10. Source: Material Indicators/Twitter*

Crunch time for infrastructure bill

As Cointelegraph reported, it may not be all smooth sailing in the coming days. Tuesday was scheduled to see voting for the United States’ infrastructure bill, which could go into law with inflammatory language regarding cryptocurrency tax procedures.

Concerns over the bill’s final form had not swayed sentiment over the weekend, however, as Bitcoin continued to gain, recovering ground originally lost in the May price crash.

“The public reacting to the infrastructure bill the way they have shown the Government how important Bitcoin is,” Danny Scott, CEO of United Kingdom exchange CoinCorner, argued Sunday.

“The public care for it and are willing to fight. They wouldn’t care if it was a bank related rule. Bitcoin is changing the world. Regardless of result it’s pivotal.”

Overall, Bitcoin was up 4.85% on the day, with weekly gains standing at 19.1% at the time of writing.

Bitcoin technicals: How low will BTC price go after failing at $42K resistance?

August 2, 2021 Coin Telegraph

Bitcoin technicals: How low will BTC price go after failing at K resistance?

Bitcoin Price

Bitcoin price rejection at $42,000 means BTC is now trying to find new high lows, but at what price levels?

Bitcoin (BTC) has seen an impressive rally of 44% with ten green days in a row. This rally and the substantial number of green days resulted in a sentiment shift. Practically two weeks ago, the market was comparable to a funeral, with many expecting more downside to $20,000.

However, the sentiment completely shifted after the breakout above $31,000. The current sentiment is the expectation of Bitcoin to rally to $100,000 or higher in the second part of this year, while on-chain analysts are back on their game, once again.

Is Bitcoin going to break upwards from here, or will a healthy correction take place? Let's take a look at the technicals.

$42K resistance stops Bitcoin breakout

*BTC/USD 1-week chart. Source:* *TradingView*

The weekly chart shows the current range-bound construction for BTC/USD. In this construction, a breakout didn’t happen. Last week, Bitcoin’s price tried to break through the resistance zone but couldn’t force a breakout yet.

Therefore, the conclusion is that the market is still unsure about the market direction at this stage. However, the weekly chart also shows apparent support in the zone between $28,000-$31,000. This level has been tested several times and is still holding up as support despite the extreme bearish euphoria the last time Bitcoin’s price visited that range.

Finally, if the market wants more information about the direction, the lower time frames often indicate further clues that should be watched.

Bitcoin daily chart primed for healthy correction

*BTC/USDT 1-day chart. Source:* *TradingView*

The daily chart of Bitcoin doesn’t tell us much information, even though the recent rally was a steep staircase of green candles.

This rally not only showed the interest in the market but also that the most popular projections are often wrong. Many people anticipated a further crash to $20,000 when Bitcoin’s price was hovering around $30,000. On-chain analysis shows that short-term holders have been selling heavily in that range, anticipating a further correction to be happening, while long-term holders have been accumulating heavily.

Thus, the exact opposite of a correction took place. Bitcoin rebounded by 44%, while altcoins have seen gains of 70%-150%.

Further, if Bitcoin’s price can’t break further upwards above $42,000, a potential higher low scenario can be validated in the region around $36,000 or $33,000.

However, a substantial corrective move to $33,000 would be unwelcome if the market is truly bullish as such a correction would grant an entry position to the latecomers once again.

Moreover, a correction to $36,000 would generate a higher low, which would confirm a market trend change. After a higher high, a higher low confirms a trend change and the bullish divergence, making the $36,000 scenario the optimal level for this to happen.

Total market cap also at big resistance

*Total market capitalization 1-day chart. Source:* *TradingView*

The total cryptocurrency market capitalization has seen a devastating and rapid crash by 55%, resulting in a sentiment switch from euphoria to depression.

However, looking at the chart, a healthy and beautiful retest has been made at the $1.1 trillion levels. This level wasn’t tested during the entire move-up. Now, it has finally got this retest, resulting in buyers stepping in.

This level is comparable to the $28-$31K region for Bitcoin, which has survived multiple tests. The total market cap of crypto doesn’t seem to be ready for an upward breakout, however, as it’s currently facing a critical resistance zone at $1.75 trillion.

The red zone has been showing resistance multiple times, forming a range-bound construction. In that structure, a higher low is needed to confirm a change in trend. In that regard, a higher low at $1.35 trillion would be a good level for bullish continuation. If the total market capitalization breaks above $1.75 trillion, new all-time highs become likely.

Key levels to watch for Bitcoin on lower timeframes

*BTC/USD 1-hour chart. Source: TradingView*

The 1-hour chart for Bitcoin shows a clear picture of the current market. On the 4-hour, a bearish divergence is spotted, which will be confirmed if the price of Bitcoin drops beneath $38,500.

With the 1-hour chart, the price of Bitcoin dropped beneath the support level at $40,800. This drop means a market breakdown has taken place, and the subsequent support had to be tested. That next support level can be found at $38,600.

The breakdown didn’t have much volume, however, as the actual stops are placed beneath the recent low at $38,500. Therefore, a heavier correction towards $36,500 and $35,000 is on the table if the market breaks down once more.

Such a correction would correct the entire market, through which Ether (ETH) could see a drop to $2,300 and $2,000 as well.

The crucial levels on the downside are found at $38,500, as well as at $36,500 and $35,000.

Finally, the crucial resistance to breaking Bitcoin’s price is found at $40,600-$41,000. If that level breaks, it’s very likely to see a continuation of the rally happening to $48,000 as the price of Bitcoin will take out the recent high at $42,000.

However, after such a substantial rally and a fast sentiment switch, a correction is very healthy, especially if Bitcoin can’t break above $40,800 in one-go.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Historically accurate Bitcoin metric nears the next ‘potential’ price peak

June 4, 2021 Coin Telegraph

Bitcoin

Exciting action for the historically accurate metric lays the foundation for a new cycle to a price peak.

Bitcoin (BTC) losing over 50% in a month may have a big silver lining as lower prices set up a classic bull flag.

On Thursday, Philip Swift, creator of the Pi Cycle Top indicator, said that this year could still see a major Bitcoin price high.

BTC price drop’s saving grace?

Pi Cycle Top uses two moving averages — the 111-day and the 350-day multiplied by 2 — to determine likely market tops with an error range of just three days.

It has proven extremely accurate, and current conditions are setting up a crossover from the two averages which suggests a return to bullishness.

“The 111dma (orange line) continues to rapidly drop below the 350dma x 2 (green line),” Swift commented on Twitter.

“This is setting up another cross, and therefore potential high, in the coming months once price starts trending back up...which I believe it will.”

*Bitcoin Pi Cycle Top chart. Source: LookIntoBitcoin.com*

Bitcoin price bottom close?

This provides a firm counterpoint to short-term price action amid fears that a so-called “death cross” of two other moving averages may cause pain in the coming weeks.

Last week, analyst Filbfilb, who together with Swift heads trading suite DecenTrader, laid out the potential for significant moves up or down for BTC/USD.

“Price action is some way from the 20 Week Moving Average (WMA) which is typically the line between Bitcoin being either in a bull or bear market and as such remains a bearish scenario for Bitcoin,” he wrote.

“Should Bitcoin find sufficient demand in the low 30s, the 20 WMA would be expected to act as resistance. A drop lower would likely make the low $20s or the 78.6% retracement a likely target. As such, price action over the next week particularly important.”

As Cointelegraph reported, however, a consensus is building that a local bottom has formed at $36,000 for BTC/USD. This was predicted even before the latest drama involving Elon Musk.

Worst month for BTC price in 10 years: 5 things to watch in Bitcoin

May 31, 2021 Coin Telegraph

Bitcoin

Strong hands are hodling stronger than ever as May 2021 lines up to be the worst May ever for Bitcoin.

Bitcoin (BTC) starts a new week bearish or as a firm “buy” depending on the source — what happens next?

After a week of uninspiring price performance, the largest cryptocurrency is still stuck in the lower $30,000 range.

With inflation worrying traditional markets and summer months traditionally good for bulls, there may yet be cause for celebration. In Bitcoin, anything can happen, however, and surprises swing both ways.

Cointelegraph Markets takes a look at five factors to consider when charting where BTC/USD might head next.

Inflation spooks macro mood

It’s a quiet day for stocks and commodities thanks to holidays in the United States, United Kingdom and elsewhere in the West.

That said, Asian markets are mostly stable anyway, as traders gear up for the beginning of the traditionally slower summer period.

Zooming out, however, and the picture gets decidedly less steady. The reason, sources are telling mainstream media, is inflation.

Long a concern amid the international rebound from coronavirus fuelled by huge central bank liquidity creation, the long-term impact of engineered “recoveries” worldwide is looming large in the horizon.

Some telltale signs are already here, such as spiralling manufacturing costs which may not be fully reflected.

“Policy makers have committed to accepting a higher level of inflation, higher volatility in inflation and as that happens you will see inflation moving structurally higher,” Mixo Das, an equity strategist at JPMorgan Asia, told Bloomberg.

“I don’t think this is in the prices yet.”

*Federal Reserve balance sheet annotated chart. Source: PlanB/ Twitter*

Inflation is by its very nature the antithesis of a Bitcoin standard, given the cryptocurrency’s fixed supply and diminishing issuance curve which cannot be manipulated.

As such, demand from institutions and those with large exposure to cash should continue to expand in line with inflation, which is being increasingly tolerated by central banks at higher levels.

In a debate about Bitcoin’s energy usage earlier this month, Saifedean Ammous, author of “The Bitcoin Standard,” suggested that around 10% of global wealth is already eradicated by inflation every year.

Weak hands can't stop selling

It’s a somewhat gloomy picture for Bitcoin hodlers on Monday as the weekend failed to produce signs of a bullish price rebound.

At the time of writing, BTC/USD is under $36,000, having slowly drifted downwards since hitting local highs of $41,000 last week.

Those highs came soon after another retest of $30,000 support which saw Bitcoin bounce at $31,000, reestablishing the familiar trading corridor it has moved in since the capitulation event earlier in May.

Depending on who you ask, this setup is either a golden accumulation opportunity or a nightmare — and the split seems to match with market experience.

According to fresh data from on-chain monitoring resource Glassnode, at current levels, old hands are adding to their BTC stack, while recent buyers continue to sell to them.

This classic “weak-hands-to-strong” direction is nothing new, but its pace is increasing.

Miners, too, are back to buying, reversing a brief cascade of selling which accompanied the first dip to $30,000.

*Bitcoin accumulation vs. BTC/USD annotated chart. Source: Glassnode/ Twitter*

“This chart is INSANE!” popular Twitter account Lark Davis responded, highlighting the sense of excitement among longtime market participants.

“Miners and long term holders accumulating, only short term holders selling. Nothing new under the sun!”

Bitcoin’s weekly relative strength index (RSI), a key metric for divining overbought and oversold territory, is also circling lows which have only been beaten by the March 2020 crash and the $3,100 capitulation in December 2018.

Key price averages cause headaches for bulls

In terms of bull or bear, there are “lines in the sand” for traders which Bitcoin still needs to preserve to retain its bull market crown.

In its latest market update, trading suite Decentrader highlighted the 200-day moving average (DMA) and 20-week moving average (WMA) as significant levels to watch.

The 200 DMA currently sits at just above $40,000 — the place at which BTC/USD saw rejection last week — while the 20 WMA is higher at near $49,000.

“Should Bitcoin find sufficient demand in the low 30s, the 20 WMA would be expected to act as resistance,” Decentrader summarized.

“A drop lower would likely make the low $20s or the 78.6% retracement a likely target. As such, price action over the next week particularly important.”

The idea that Bitcoin could return to its 2017 high of $20,000 is unpopular for many, including PlanB, the creator of the stock-to-flow-based (S2F) price models.

While acknowledging that his models were still being “tested” by price swings, the idea of a fresh capitulation down to $20,000 is not something he considers likely.

“Of course I disagree, S2F and on-chain point to much higher prices ($100-288K). Time will tell,” he said during Twitter discourses last week.

He added that Bitcoin’s “realized price” — a calculation of BTC/USD based on the price at which each coin last moved — is now $23,000. During the 2013 and 2017 bull runs, realized price shot up by an order of magnitude, and this year is yet to copy them.

“At $23K we have some way to go IMO,” he commented alongside a chart showing realized price against the 200 WMA.

*Bitcoin realized price vs. BTC/USD vs. months to halving events. Source: PlanB/ Twitter*

Funding rates soothe concerns

For some counterpoint, an example of the hidden bullishness which may serve to characterize near-term price action lies in exchange funding rates.

Currently healthily negative, these suggest that it’s very much a case of shorts paying longs under current circumstances.

“Open interest has failed to recover with leverage participants being largely wiped out in the sell off and not re-entering. Funding has also remained low / negative which further echo’s the market,” Decentrader added.

As Cointelegraph reported, the capitulation of leveraged bets during the $30,000 sell-off has effectively reset market composition as traders avoid taking risks.

This should allow more organic price growth fuelled by genuine demand from those more likely to hodl BTC for the long term rather than as a short-term speculative bet.

Worst May ever?

Is this the worst May ever? In terms of monthly returns for Bitcoiners, it definitely looks like it.

On the last day of May 2021, the mood is likely anything but positive, as monthly losses for hodlers total almost 40%.

By comparison, May tends to be a lucrative month for BTC/USD — in 2017 and 2019, for instance, the pair gained more than 50% in May.

2018 was an outlier with 19% losses, but even these pale in comparison to this year. May 2021 is currently on track to be the worst month since 2013 in terms of both Q1 and Q2 performance.

*Bitcoin monthly returns percentage. Source: Bybt.com*

And yet, doom and gloom are far from everywhere. Beyond Bitcoin, altcoin markets are showing signs of life, led by a continued rebound for XRP, up 13% on the day.

As traders note, volumes for largest altcoin Ether (ETH) in particular are promising, and contrast bear market behavior which tends to see little trading activity.

“We shouldn't bother too much about a weaker BTC as it might follow the stronger alt/usd pairs or continue its chop/sideways while alts go up,” trader Cypto Ed concluded.

BTC price analysis