Bitcoin miners seem to be mitigating risk with BTC’s sustained price over $30,000, drawing attention to the resilience of this level.
As we usher in the first week of July, Bitcoin (BTC) is trading at $31,222, offering traders a sigh of relief as the $30,000 support threshold remains strong.
The refusal of BTC’s price to bow down to bearish pressure after 20% gains in Q2 is a testament to its robustness, with weekly and monthly trends maintaining their strength. So, what lies ahead?
The conventional finance markets are likely to be quiet this week, as Wall Street gears up for the Independence Day celebrations and only a smattering of U.S. macroeconomic data is anticipated.
For bulls to have a shot at breaching the resistance that has held for several months, Bitcoin needs volatility triggers from elsewhere.
Opinions vary among market participants. Some are optimistic, believing that $32,000 and beyond is easily within reach, while others foresee this month marking the apex of Bitcoin’s 2023 revival.
This article highlights five major factors likely to affect BTC price performance in the forthcoming days and weeks.
Bitcoin’s Short-term Price Potential Could Reach $40,000
The closure of the previous week proved favorable for bulls, with Bitcoin experiencing only minor volatility and BTC/USD continuing to ascend overnight.
The onset of this week brought a peak at $30,850 on Bitstamp, according to data from Cointelegraph Markets Pro and TradingView. This marks the latest attempt at the $31,000 mark and the year’s highs.
For a trend shift, the required fuel is still missing, prompting more optimistic traders to adopt a wait-and-see approach regarding upward continuation.
“My Bitcoin plan remains unaltered,” Jelle, a well-known trader, briefly outlined in his latest analysis shared with Twitter followers.
He stated, “The market structure is bullish; we’ve reclaimed the 200-week EMA. Once we break the $32k resistance area, I anticipate the commencement of the bull market. Until then, we’re trading within the range and purchasing deeper pullbacks.”
Jelle pointed out the 200-week exponential moving average (EMA), which, along with its simple moving average (SMA) equivalent, continues to offer market support after a short-lived challenge in June.
An associated chart pinpointed the current all-time high of $69,000 as the first major upside target.
Crypto Ed, another trader, expressed hope for a push towards $36,000 and potentially $40,000, but also considered the probability of a dip to $28,000 first — already a favored zone for dip-buyers.
Despite last-minute volatility into the month’s end, with BTC/USD wicking to $29,500, he stated the market structure remained “good.”
Meanwhile, on-chain monitoring resource Material Indicators highlighted the role of Bitcoin whales in maintaining the BTC price range.
“Without a doubt, BTC whales have been distributing in the $30k range, but they’ve also been purchasing the dips, which have aided in keeping BTC within this range,” it noted in further analysis.
As previously reported by Cointelegraph, Bitcoin’s price has never suffered more than a 10% loss in July. However, this isn’t deterring a popular trader, CryptoBullet, from predicting an end to bullish moves this month.
Anticipating the area around $36,000 as the local top, CryptoBullet foresees the downside — including surrendering the key moving averages — as the next step.
“I’m not suggesting we’ll plunge to 20k this month or the next. In my opinion, it will occur in Q4,” he mentioned in subsequent Twitter comments on his initial forecast.
Emphasis on Banks due to Bond-Buying Losses
The macroeconomic climate is expected to be soothingly calm this week as the U.S. celebrates the July 4th Independence Day holiday.
With minimal macroeconomic data on the horizon and barring unforeseen events, crypto is unlikely to experience much volatility from sources such as shifting inflation expectations.
However, these expectations remain firmly entrenched in interest rate hikes set to resume later this month when the U.S. Federal Reserve convenes to determine future policy.
As of July 3, data from CME Group’s FedWatch Tool estimates the odds of a 0.25% hike at nearly 90%. The decision is slated in three weeks.
“Every week feels crucial as Fed rate expectations fluctuate rapidly. Meanwhile, stocks are touching 52-week highs, and trading has been impressive,” financial commentary resource The Kobeissi Letter summarized about the mood, dubbing the coming week “short but crucial.”
In the meantime, the U.S. banking sector is attracting increased attention.
Regional banks continue to face challenges, as reflected in the performance of the KBW Regional Banking Index.
Bank of America (BoA) is also under scrutiny for its loss-incurring bond purchases, a problem also plaguing Germany’s central bank.
“These astonishing headlines aren’t getting the attention they deserve,” opined angel investor Balaji Srivinsan about a Financial Times piece on the Bundesbank’s predicament.
He noted, “The central bank of the world’s fourth-largest economy may need a bailout because it bought bonds. This isn’t a tech crisis or even a banking crisis. It’s a bond crisis, a central bank crisis, a fiat crisis.”
Kobeissi, meanwhile, warned that the U.S. bank implosions, which ignited the Bitcoin bull run in March, share key similarities with the current situation at BoA.
Bitcoin Miners Initiate Record Exchange Transfers
Bitcoin miners are emphasizing the importance of BTC’s price movement beyond and sustaining the $30,000 mark — but perhaps not in the way bulls would hope.
Data from on-chain analytics firm Glassnode reveals a significant surge in the number of coins miners are transferring to exchanges.
This has even exceeded levels from April 2021, when BTC/USD hit $58,000 in the year’s first new all-time high.
“Following the surge in the spot price above the psychologically significant $30K level, Bitcoin miners have continued to send substantial quantities of BTC to exchanges,” Glassnode noted.
“Currently, miners are transferring $105M to exchanges, the second-largest USD-denominated transfer on record.”
However, miner balances have maintained a slow overall uptrend since the start of 2023. Glassnode data shows that the balance tally was 1,824,377 BTC on Jan. 1, compared with 1,827,916 BTC on July 2.
Despite the sales, there’s scant evidence suggesting that BTC miners are facing hardships. The hash rate currently hovers near all-time highs, while network difficulty is a mere 3.26% below its record levels seen last month.
BTC Hodlers in Profit Not Selling
A more encouraging image emerges from the steadfast Bitcoin investor cohorts refusing to sell, regardless of the price.
Even in the context of this year’s gains, Bitcoin hodlers remain resolute in their determination not to take profit on a large scale.
This commitment is now mirrored in the proportion of the BTC supply deemed “illiquid” or unreachable if strong buying pressure resurfaces.
Glassnode’s illiquid supply change metric is “extremely elevated” and currently at levels not seen except during the nadir of the 2022 bear market. While prices have risen, so too has hodler conviction.
On paper, hodlers have every reason to take profit at $30,000. Glassnode’s long-term holder market value to realized value (LTH-MVRV) metric, which charts the profitability of coins held for 155 days or more, currently indicates that the average LTH entity is 47% in profit on their position.
Ambivalent Sentiment Reflects Investor Indecision
Lastly, the jittery disposition of the average crypto market participant continues to be starkly visible in sentiment data.
The Crypto Fear & Greed Index persistently underscores just how pliable sentiment is, depending on how Bitcoin treats the $30,000 mark.
It’s not only BTC/USD facing a critical resistance/support flipping task; Ether ETH $1,960, too, has a challenge to reclaim $2,000.
As a result, Fear & Greed continue to oscillate between the mid-50s and mid-60s, representing a “neutral” to “greed” market sentiment.
Current 2023 highs for the Index are at 69/100, with levels at Bitcoin’s 2021 all-time highs of $69,000 only about 10% higher.