Bitcoin (BTC) is still starting a new week in holiday mode as US financial markets are away for Independence Day.
The largest cryptocurrency, stuck below the increasingly alarming $ 20,000 mark, is still feeling pressure from the macro environment as talk of the lower levels is still full of speculation.
After a quiet weekend, the accommodation They find themselves trapped in a narrow range as it seems harder to believe that there is a chance of an upside-down outbreak.
As a trader and analyst suggests until July 4 as a “wild run to the bottom” site for cryptocurrency markets, the countdown is underway for bitcoin to counter the impact of the latest bull run.
What could next week still be? Cointelegraph looks at the potential market drivers for the coming days.
BTC price is offering its time over the long weekend
Bitcoin emerged from the weekend unscathed, but the classic traps of off-peak trading remain.
The United States will not return to the trading desks until July 5, giving plenty of opportunities for some classic weekend price action in the meantime.
To date, the market has held back from volatility – apart from a short spike at $ 18,800, the BTC / USD pair has remained in the $ 19,000- $ 19,000 zone for several days, $ 19,500.
The trend did not change even in the weekly close, as data from Cointelegraph Markets Pro and TradingView showed, and the psychologically significant $ 20,000 threshold remains unchallenged.
“While it is below the lower level of the range, we can expect a reduction to $ 18,000,” he said. say again Tony’s popular trading account for his Twitter followers as part of a new update on July 4:
“The last few days are very boring in the markets, and that is normal for the midfield. »
In terms of disadvantage targets, others continued to look at the $ 16,000 area.
In 2018, The Orange MA was the Bottom. In 2020, the Green MA was at Bun. He currently holds the Green MA (16-17K). If it breaks then there is a possibility of Next Bottom Blue MA (12-13K) $ BTC pic.twitter.com/rZILTAOLXf
—Tradder_J (@Trader_Jibon) July 3, 2022
In 2018, the orange indicator was the lowest. In 2020, the green MA was the bottom line. Currently, the green MA (16 to 17,000) is maintained. If it breaks, there is a chance that the next Blue MA (12-13,000) $ BTC pic.twitter.com/rZILTAOlXf – Trader_J (@Trader_Jibon) July 3, 2022
With no significant spread on bitcoin futures and stagnant performance in Asian markets, there was little to do in terms of short – term price targets.
Meanwhile, the US dollar has continued to be close to its 20-year highs after recovering from its last challenge.
The US Dollar Index (DXY) was trading above 105 at the time of writing.
Gold is nearing a ‘blowout’ against US stocks
With Wall Street closed for Independence Day, U.S. equities may breathe a little on July 4th.
However, in the case of a popular chart, the focus is on the strength of the stock against gold (XAU) in the current environment.
In a Twitter thread, gold regulator Patrick Karim specifically indicated that the precious metal was about to hit a historic blowing zone against the S&P 500 (SPX).
After reaching its lowest point at the end of 2021, the gold to S&P ratio is recovering this year and is about to break a limit, which has historically led to a significant increase thereafter.
“Gold is approaching the ‘explosion zone’ against US equity. Significant cash and mineral gains have surpassed previous increases, ”said Karim.
The same cannot be said for the US Dollar, with the strength of the Dollar keeping the XAU / USD ratio firmly below $ 2,000 since March.
However, for those with the money, the implications are that even a slight pressure on the XAU / SPX ratio will lead to significant results.
Think about that for a moment.
– Patrick Karim (@ badcharts1) July 3, 2022
Note that you will not have to go back to previous highlights in 2011 for the #Gold to #Spx ratio to be much higher for silver and miners. Think about it for a minute. – Patrick Karim (@ badcharts1) July 3, 2022
This prediction raises the question of the extent to which bitcoin has the potential to break macro trends. Breaking out against BTC on gold would have the natural ripple effect if Karim’s case plays out, thanks to the continued correlation with stocks.
“After escaping the lateral pattern that has been forming for a year and a half, the correlation coefficient has risen sharply to 86% against the S&P 500,” summary this weekend the popular trader and analyst CRYPTOBIRB:
“Today, with a ratio of 0.78, it is still very positive. »
Another analyst, Venturefounder, noted that bitcoin is still tied to the Nasdaq move.
Note previous bottoms (December 2018 & March 2020) that occurred as #BTC and $ QQQ peak correlation, suggesting that macro has always had an impact on BTC bottoms. We can more likely predict that a bottom macro will call your BTC again this time. pic.twitter.com/szmS4c6WV8
– Fiontar ◎ undΞr (@venturefounder) June 26, 2022
Meanwhile, #Bitcoin and #NASDAQ are still following the same trend. Note that the previous lows (December 2018 and March 2020) occurred when the correlation between #BTC and $ QQQ was at its peak, suggesting that macro analysts have always influenced BTC lows. We can predict that macro analysts are more likely to set up BTC again this time. pic.twitter.com/szmS4c6WV8 – enterprisef ◎ undΞr (@venturefounder) June 26, 2022.
Against the dollar, Cointelegraph, meanwhile, reported that bitcoin’s inverse correlation is now at a 17-month high.
The real time for Hayes ‘mad rage is up’
One particular market participant considers July 4 to be a holiday, as well as a Freedom Day – for Bitcoin at least.
With markets already closed and the price of BTC already on the brink of support, Arthur Hayes, former CEO of derivative platform BitMEX, has designated this long weekend as a long day of reflection for the cryptocurrency markets.
The reasoning seems logical. At the end of June, the Federal Reserve raised its key rates by 75 basis points, providing fertile ground for a negative reaction from risky assets. The low liquidity of out-of-hours trading during the holidays increases the potential for upward or downward price volatility. Taken together, the cocktail, as Hayes warned last month, could be powerful.
By June 30 (end of second quarter), the feeder will prescribe a 75 bp rate increase and has begun to reduce its balance sheet. July 4 falls on Monday, and it’s a federal and bank holiday, ”he wrote in a blog post:
“This is the perfect setting for another sharp fall in cryptocurrency prices. »
To date, however, there have been no signs of what Hayes says will be a ‘bottom-up’. The BTC / USD pair has been almost stable since the end of last week.
The deadline should be July 5, as the return of traders and their capital could provide the liquidity needed to stabilize the markets and buy back the coins at low prices in the event of a last – minute fall.
Hayes also said that his earlier forecast for BTC / USD was falling at $ 27,000 and Ether (ETH) / USD at $ 1,800 was already “in color” in June.
Mining difficulty continues to increase
Despite considerable concern about the ability of miners to withstand the current decline in the price of BTC, the foundations of the Bitcoin network remain stable.
It’s a testament to the miners’ determination to stay on the network, with the next readjustment expected to ease the difficulty next week.
After a modest drop of 2.35% two weeks ago, the difficulty, which increases and decreases automatically due to fluctuations in miner participation, is unlikely to change this time.
According to estimates from BTC.com’s chain monitoring capacity, the difficulty will increase even if current prices remain the same, adding 0.5% to what remains near all – time metric hards.
As for the miners themselves, there is a perception that it was the less efficient players – perhaps the newcomers with higher base costs – who were forced to.
Details published on social media with Capriole’s CEO asset manager Charles Edwards last week revealed that the cost of mass miners’ production is around $ 26,000. Of this, electricity is $ 16,000, which means that miners’ overheads directly affect their ability to limit losses in the current environment.
“We traded below the power cost in June, but the floor has since fallen because inefficient miners are engaged,” Edwards noted.
Sea of drops
The metrics on a chain of Bitcoin that focuses on record overselling are nothing new this year and especially in recent weeks.
Read also: Top 5 cryptocurrencies to watch this week: BTC, SHIB, MATIC, ATOM, APE
The trend continues in July, as the network returns to unprecedented storylines following the March 2020 transition crash.
According to chain analysis firm Glassnode, the number of coins thrown at a loss is now the highest since July 2020. Glassnode analyzed the weekly moving average of unspent transaction outflows (UTXO) at a loss.
Similarly, the percentage of UTXOs in two – year low profits hit just over 72% on 3 July.
Bear markets can produce some welcome, albeit rare, money lines. Bitcoin transaction fees, which were once very high during bullish periods of intense network activity, are now at their lowest level since July 2020. The median fee is $ 1.15, Glassnode reveals.
As Cointelegraph reports, the same is true of Ethereum’s network gas charges.
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