Bitcoin (BTC) begins a “giant” week in a precarious position as key support remains out of reach for bulls.
Following further losses in the cryptocurrency market over the weekend, the BTC/USD pair closed the week below $26,000 for the first time in three months.
Both Bitcoin and altcoins continue to struggle thanks to legal battles in the United States and their impact on market sentiment.
However, the fragile markets will now be faced with a series of volatility triggers, as the release of US macroeconomic data accompanies the next steps in the cryptocurrency legal debacle.
In what promises to be five days full of surprises, many traders will likely not experience any of the lackluster sideways price action characteristic of the crypto market prior to the recent turmoil.
What will next week be like? Cointelegraph analyzes the main aspects to take into account when it comes to Bitcoin and the evolution of prices in the cryptocurrency market.
Bitcoin loses its key trend line, but some remain bullish
The Bitcoin price closed the weekly candle in a disappointing position thanks to late-breaking declines that wiped out some of the value of the cryptocurrency.
The delisting of several altcoins by certain trading platforms concerned about legal ramifications in the US sent prices tumbling, sending BTC/USD to its lowest weekly close since mid-March, data shows. Cointelegraph Markets Pro and TradingView.
In doing so, the pair also locked in the 200-week moving average (MA) for support.
“A BTC weekly candle close below the 200-week MA could confirm it as missing support,” warned in advance the trader and analyst; Rekt Capital.
“In that case, BTC could rally towards the MA next week, potentially turning it into new resistance. This kind of technical events turnaround could precede further declines.”
Michaël van de Poppe, founder and CEO of trading firm Eight, expressed similar concerns about the fate of the total cryptocurrency market capitalization.
Total market capitalization is beneath the 200-Week MA and EMA.
—Michaël van de Poppe (@CryptoMichNL) June 12, 2023
With traders’ downside targets already stretching to $24,000 and below, some took the opportunity to take more bullish stances both in the short and long term.
Daan Crypto Trades eyed upside potential thanks to losses over the weekend that gapped CME futures.
That gap sits between $26,150 and $26,500, with the BTC/USD pair previously “filling” another in a matter of hours.
Continuing, popular trader Credible Crypto insisted that, regardless, long-term resistance levels for Bitcoin would not pose much of a problem in the end. The $40,000 level, he repeated, was still a choice target.
“When there is a major correction to the downside and people are submerged, there is resistance to the upside as those who waited sell the moves higher. When there is a capitulation to the downside and people have drowned been forced to sell at the low) that selling pressure no longer kicks in as we go higher because ‘there’s no one left to sell'”, He said part of the weekend’s Twitter commentary.
“If the waiters sold at the low, then the only selling pressure above is from short-term traders/profit takers and that is not enough to stop a major impulsive move in its tracks for long. expect the “important resistance levels above to melt much faster than most expect.”
Bitcoin prepares for a very important macroeconomic week
The coming week offers a rare deluge of potential cryptocurrency price triggers from the broader economic and geopolitical establishment.
– Deadline for Binance and Binance US to respond to SEC’s application for a temporary restraining order
– Motion for temporary Binance US restraining order hearing
– Hinman’s documents release (XRP)
-CPI Data Release
— Daan Crypto Trades (@DaanCrypto) June 12, 2023
In addition to the continued ramifications of the United States Securities and Exchange Commission (SEC) against various exchanges, the macroeconomic data promises volatility of its own.
The May Consumer Price Index (CPI) will be released on June 13, and unlike last time, markets are expecting the Federal Reserve to pause raising interest rates.
This would end a cycle of non-stop increases that began in late 2021, just as Bitcoin reached its all-time high.
According to Using CME Group’s FedWatch tool, the odds of a pause stood at 75% at the time of writing on June 12.
With easing economic conditions on the horizon, some market commentators inside and outside of cryptocurrency are considering the odds of a rally in risk assets.
Biggest opportunity for equities to go higher? Rapid decline in inflation as rents and food costs come down, which allows Fed to pause int rate hikes in June and ultimately reduce rates by YE
Biggest risk? Narrow breadth.
– Eight stocks account for 30% of S&P 500 market cap… pic.twitter.com/WePpRfNzxz
—Gary Black (@garyblack00) June 12, 2023
“Pretty convinced the money maker this week is a Fed/Skip pause sending BTC past $30,000,” said the popular trader Traderhc to his Twitter followers.
Also an analyst, Skew, added that the CPI “probably will set the pace” for the week’s price.
In the meantime, in addition to CPI, the June meeting of the Federal Open Market Committee may lead to statements from Fed Chairman Jerome Powell that influence the market.
The rate decision will be announced on June 14, along with the European Central Bank’s announcement a day later. More macroeconomic data will be released on June 15.
Before all that though, the fallout from the SEC novel against Binance and Coinbase may already move prices.
“Tomorrow is going to be a big day for the market,” Philip Swift predicted on June 11, co-founder from DecenTrader.
“SEC needs to respond to Coinbase’s request for rulemaking… …and US district court hears SEC’s petition for a temporary restraining order on binance US. at 2pm. Buckle up.”
Bitcoin fundamentals remain positive
As is often the case with Bitcoin, short-term price action finds its match in the underlying data on the network, which shows a totally different trend.
This week, like almost every week in 2023, the network difficulty and hash rate are pointing to new all-time highs.
According to some estimates, the hash rate is already higher than ever, while the difficulty will increase by about 2.5% on June 14. This will cause it to exceed 53 trillion for the first time.
BTC.com data confirm that the fundamentals of the network are in “bullish only mode” despite the pressures on BTC prices, since in 2023 there will only be three difficulty reductions out of a total of 12 adjustments.
“Bitcoin hash rate won’t stop growing. This is crazy,” reacted Mitchell Askew, Blockware Social Media Associate.
“Mining is cutthroat competition and free markets in their purest form.”
As we’ve told you on several occasions, the concept of Bitcoin spot price following hash rate, in particular, has long been a mantra for industry stalwarts, including the popular but outspoken proponent from BTC; Max Keiser.
Mining deposits increase
However, LookIntoBitcoin founder Phillip Swift described the current difficulty levels as “increasingly challenging” for all but the largest miners.
#bitcoin Miner Difficulty just made a new all-time-high!
An increasingly challenging environment for any underperforming miners.
Difficulty now at 51.2 Terahashes.
Free live chart: pic.twitter.com/V8QNKyXAPv
— Philip Swift (@PositiveCrypto) June 9, 2023
For its part, data from on-chain analytics company Glassnode tracks miner onboarding in real time.
“Despite an uncertain macroeconomic environment coupled with intensifying regulatory pressure, ASICs continue to activate as Bitcoin’s hash rate (7DMA) hits an all-time high of 381 EH/s,” commented researchers on a hash rate graph.
“This equates to 381 quintillion guesses attempted every second to solve a block puzzle.”
Meanwhile, data from Glassnode appears to show that miner deposits to exchanges reached their highest daily levels since 2019 last week.
Across the past week, #Bitcoin Miners have been sending a significant amount of coins to Exchanges, with the largest inflow equal to $70.8M.
This is the 3rd largest inflow on record, -$30.2M less than the peak inflow of $101M recorded during the primary bull market of 2021. pic.twitter.com/w4fNFMcxr4
— glassnode (@glassnode) June 11, 2023
For his part, James Straten, data and research analyst at the cryptocurrency platform CryptoSlate, he pointed Poolin as the main contributor of deposits.
Whales Increase BTC Exposure During Altcoin Crash
Analyzing the impact of the latest cryptocurrency market upheaval, research firm Santiment saw reason to be optimistic.
According to results published on June 11, this is due to the buying conviction of Bitcoin’s highest-volume investor cohort: whales.
As Cointelegraph previously reported, the largest class of whales has diverged from the rest of the investor base since May, hoarding while others distribute BTC.
With altcoins tumbling over the weekend, the whales seemed to take the opportunity to increase, rather than decrease, their exposure to BTC.
“As the altcoin craze has unleashed, a bullish divergence between the Bitcoin whale buildup and price crash is quietly observed,” commented Santiment.
“With whale holdings rising by ~1,000$BTC per day as prices fall, there is reason to believe a strong bounce may occur.”
At the same time, sentiment in the broader cryptocurrency market continues to reject knee-jerk reactions to news.
He Crypto Fear & Greed Index It remains in “neutral” territory, with hardly any movements in recent weeks, hovering around the exact center of its 0-100 scale.
This article does not contain investment advice or recommendations. All investing and trading involves risk, so readers should do their own research before making a decision.