Economic news

Is the Bearish Lull on Bitcoin over?

Bulls and bears are tugging at the $40K threshold with mixed success. Bitcoin has crossed this critical technical and psychological level three times but has failed to consolidate above it. The current price momentum is occurring with some increased trading volumes. Probably, the summer holidays and the opening of the borders after the extended lockdowns are contributing here. The current price rebound has started with low trading volumes, which could well indicate market manipulation, which coincided nicely with the Elon Musk statement and the short squeeze.

Is the Bearish Lull on Bitcoin over?

The triangle where the bitcoin price had consolidated for the previous two months was upwards. Moreover, the short-squeeze over the weekend took the rate above the 50- and 200-day moving averages, which is a strong bullish signal. A local battle for $40K may turn out to be the final surrender of the bears.

Conversely, profit-taking could well derail the latest bullish momentum. Technical indicators do not bring clarity either. For example, one of the Glassnode Market Value to Realised Value Ratio (MVRV) metrics showed a signal that could be perceived as a long-term bullish signal as well as a long-term bearish one.

Is the Bearish Lull on Bitcoin over?

The Bitcoin network has started to show growth again. While we have not seen any sharp spikes in computing power so far, market participants cheer any positive dynamics. In addition, it is generally accepted that the price of a benchmark cryptocurrency can follow the hash rate. Since the beginning of July, Bitcoin’s hash rate has increased by 21%. It may be a coincidence, but the price has risen by 21% over a considerable period. Bitcoin’s dominance index continues to increase to 48.5%.

Thus, the crypto market is now at a crossroads. The Greed and Fear Index for Bitcoin and major cryptocurrencies jumped 29 points, switching from “extreme fear” to “neutral”, ending up at “50”. Splitting the scale by half, this indicator also points to the same conclusion that can be drawn from the Glassnode indicator reading. If one looks at the rising bitcoin dominance, investors are increasingly focused on the benchmark cryptocurrency.

The practice shows that self-sustaining dynamics are more common for altcoins during periods of calm in Bitcoin after a bullish growth phase. When BTC’s prospects are challenging, investors prefer to keep their distance from alternative cryptocurrencies, understanding the low depth of extreme volatility in this asset class.

Источник: FXPro

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree