Bitcoin (BTC) is starting the new week in a solid position above $30,000 after its recent runaway gains.
BTC price action continues to meet bulls’ expectations after weeks of sideways trading has brought little relief. Can it go on?
This question occupies every trader this week. $30,000 remained intact through the weekly close and beyond, but anything can and can happen in a volatile crypto market.
The macroeconomic climate is somewhat ‘normal’ for the last week of June, offering some potential catalysts for risk asset prices but avoiding the simultaneous release of several important data.
The weekend news out of Russia appears to have had little impact on market action elsewhere, as most of it was completed before the start of weekly trading.
As for Bitcoin itself, it appears that an inventory phase has begun, with fundamentals in turn primed to tumble down from all-time highs.
Sentiment is also volatile, with $30,000 in particular being a crucial value.
Cointelegraph takes a look at these factors and more in the weekly rundown of what’s affecting BTC price action in the short-term.
Bitcoin bulls protect $30,000 at week’s close
Bitcoin fell during the latter part of the weekend after briefly touching $31,000.
Despite a lack of momentum, the bulls managed to defend $30,000 overnight and at the time of writing on June 26, $30,500 is back in focus, according to data from Cointelegraph Markets Pro and TradingView.
BTC/USD 1 hour chart. Source: TradingView
Overall, BTC/USD gained 15.6% last week, posting the third-best weekly performance of 2023, according to data from monitoring resource CoinGlass.
BTC/USD yield comparison (screenshot). Source: CoinGlass
“This week is all about turning the $31,000 resistance/supply zone into support,” said popular crypto trader Tony told Twitter followers.
“That’s all I care about, but I’ll be sticking with it for a long time until we consolidate below that level. On sharp declines I will finish in profit and look for a re-entry.”
He added that both Bitcoin and Ether (ETH), the largest altcoin by market cap, faced resistance, with the latter facing a $2,000 battle ahead.
“It’s definitely going to be an important week for all of us,” he said.
Fellow trader Jelle agreed, forecasting fresh gains on the horizon once the $30,000 mark is finally cleared.
Trader and analyst Rekt Capital called the broad bitcoin price correction “over” and noted renewed inflows into altcoins.
“We’re already seeing some cash flow into altcoins as BTC remains stable,” part of the weekend’s analysis specifiedadding that the overall crypto market cap performed an impressive support retest.
Also, Michaël van de Poppe, founder and CEO of trading firm Eight, had his eyes on the entire crypto market hoping for a possible recapture of the 200-week moving average.
Fed Chair Powell and PCE data headline ‘huge’ macro week
The week is expected to be dominated by two major events from the broader economy, most notably data prints from the US, which are set to follow comment from Federal Reserve Chairman Jerome Powell.
Powell will hold two days of “discussions” on the economy from June 28-29, while June 30 will release the latest US Personal Consumption Expenditure (PCE) index.
Powell has previously explained that this is the Fed’s preferred metric for measuring inflation trends, with a better-than-expected figure potentially having implications for its next decision on rate adjustments.
“Huge week with ‘Fed pivot in question’,” financial commentary source The Kobeissi Letter summarized in some of the Twitter coverage.
Kobeissi pointed to the possibility that the Fed could end its rate-hike cycle for good, while Powell previously hinted that rate hikes could continue after remaining unchanged in June.
The latest data from CME Group’s FedWatch tool puts the probability of a rate hike in July at over 70% as of June 26th.
Chart showing the Fed’s target rate probabilities. Source: CME Group
Mining difficulty due to falling BTC price increases
In an interesting, if likely temporary, counterpoint to BTC price strength, Bitcoin network fundamentals are cooling their own gains.
According to the latest estimates from BTC.com, the difficulty of the Bitcoin network is likely to decrease in the upcoming June 29 realignment.
This will be the first downside correction since early May but is currently forecast to be the second largest in 2023 at around -2.5%.
Overview of the basics of the Bitcoin network (screenshot). Source: BTC.com
Overall, however, the change in historical context with the mining company Simple Mining is modest descriptive the combination of increasing spot price and decreasing difficulty as “two miners’ favorite pastimes”.
Meanwhile, James McAvity, CEO of Texas-based bitcoin energy company Cormint, suspected local events were driving the difficulty.
The hash rate — an estimated measure of the computing power expended on mining — showed similar behavior on the day after declining from all-time highs the week before, according to data from data source Blockchain.com.
Bitcoin RHODL Ratio Hints at “New Breakout”
Bitcoin is at the beginning of a “new speculative cycle,” believes popular analyst Philip Swift.
In his latest Research Referring to Bitcoin’s RHODL ratio metric, the LookIntoBitcoin founder argued that BTC supply is gradually evolving from a hodler-based to a speculative instrument.
Swift’s RHODL examines the realized value of coins in specific age groups – their value at the time of their last movement. The RHODL ratio looks at the one week band versus the one to two year band.
“It also calibrates for increasing hodl’ing over time and lost coins by multiplying the ratio by the age of the market in number of days.” If the 1-week value is significantly higher than the 1-2- year value, this is a signal that the market is becoming overheated,” Swift explains in his introduction to LookIntoBitcoin.
Although complex on paper, the RHODL ratio acts as a useful tool for bitcoin price cycles and is currently repeating classic behavior expected at the start of bull markets.
While late 2022 is the property of long-term traders, opportunistic traders are now stepping in again, as the metric suggests, suggesting a transition to broader mainstream trading interest.
“As new players enter the market and younger coins have higher value, the RHODL ratio seems poised for a fresh breakthrough,” Swift commented.
Bitcoin RHODL Ratio Annotated Chart. Source: Philip Swift/Twitter
Sentiment could ‘swing the other way’
Crypto market sentiment appears to be heavily concerned with the fate of the $30,000 price level.
Related: Bitcoin’s ‘parabolic advance’ means BTC price will hit all-time high in 2023 – traders
The Crypto Fear & Greed Index, which measures the composition of market sentiment, has fluctuated significantly over the past few days as BTC/USD attempts to establish fresh support.
After highs of 65/100 on June 22nd, the index is down 10 points and is trending towards “neutral” territory as momentum in spot prices wanes.
The index is a lagging indicator but shows how sensitive the market is to recent price movements and not just BTC. ETH is also attempting to flip $2,000 for support.
Based on sentiment data from popular traders warned against longing until clearer signals were given.
“Sentiment could turn the other way,” he said.
Crypto Fear and Greed Index (screenshot). Source: Alternative.me
Magazine: Gary Gensler’s Job in Jeopardy, BlackRock’s First Spot Bitcoin ETF and Other News: Hodler’s Digest, 11-17 May June
This article does not contain any investment advice or recommendations. Every investment and trading activity involves risk and readers should do their own research in making their decision.