Market sentiment has improved significantly this week, as BTC tops resistance at $40k. However, derivative traders remain cautious, as experts predict that the market may shift from bullish to bearish.
The Fundamental Look
After six long weeks of rallying between the $30,000 and $36,000-mark, Bitcoin finally crossed the $40,000 psychological level, alleviating a bit of the bearish market sentiment. However, data from the leading platforms indicate that derivatives traders are still walking on eggshells. (See Bitcoin stock comparison on TipRanks)
The week started with Bitcoin trading at just above $32,000, reaching $40,667.28 on July 28th for the first time since mid-June. The upward trend of BTC for the sixth consecutive day is partly due to a short squeeze and the FUD about Amazon planning to accept Bitcoin and other cryptocurrencies as forms of payments. Owing to the dramatic rise of BTC and other cryptocurrencies this week, experts underline that a short squeeze of heavily leveraged traders may have added to upward pressure on prices.
Meanwhile, institutional investors continued offloading BTC as negative sentiment prevails. Per a recent report issued by Coinshare, Bitcoin-based funds saw the largest outflows with $24 million, or 85% of combined outflows from crypto products. Monthly outflows for BTC are now at $49 million, although year-to-date flows remain positive at $4.1 billion.
In other related news, BTC Perpetual Futures trading on Binance hit an all-time high of $48,168, topping the 50-day moving average acting as resistance. The Grayscale Bitcoin Trust (GBTC) reflects Bitcoin’s bullish sentiment, especially after its premium over spot prices reached the highest levels since May. Moreover, Bitcoin’s upward trend has also led sellers to quickly cover positions, which may lead to even higher prices in the coming week.
In adoption announcements, Glen Oaks Escrow, one of Southern California’s largest independent escrow companies, has announced its first property refinancing with a Bitcoin-backed loan. Meanwhile, Amazon denied that it plans to accept BTC by the end of this year, sparking a retrace of earlier gains tied to speculation that the eCommerce giant was forging ahead with these plans. Finally, a new government-backed project in Kazakhstan aims to authorize local banking institutions to facilitate BTC transactions officially.
Whales Of the Week
- July 23: 15,349.236 BTC moved from multiple addresses to an unknown wallet
- July 24: 15,379.934 BTC moved from multiple addresses to an unknown wallet
- July 25: 15,276.3111 moved from multiple addresses to an unknown wallet
- July 26: 20,888 BTC moved from multiple addresses to Binance
- July 27: 3,497.317 BTC moved from multiple addresses to Bitfinex
- July 28: 10,219.484 BTC moved from multiple addresses to an unknown wallet
- July 29: 15,914.33 BTC moved from multiple addresses to an unknown wallet
The Technical Take
After weeks of consolidating with a narrow range amid falling volumes, Bitcoin managed to break out from a downward trending equidistant channel before attempting to break the prevailing downtrend in prices. For the week of July 23rd to 29th, BTCUSD surged 22.14%, outpacing an 11.48% climb in ETHUSD and an 8.45% gain in ADAUSD.
This breakout was accompanied by a corresponding jump in trading volumes, confirming the move higher. After an apparent double-bottom appeared on July 21st just below the $30,000-handle, BTCUSD has since broken above the channel and recorded an eight-day winning streak.
Given this dramatic reversal, a slight technical retrace may materialize over the coming sessions, even though the pair is currently setting up with an ascending triangle pattern. Any clean break and close above resistance presently sitting at $40,900 could pave the way towards the next resistance at $42,900 before testing the 200-day moving average sitting just above $44,000.
On the downside, support is currently holding firm at $39,400. Any break lower could see more buying support emerge at $36,850. The 50-day moving average is also trending higher, acting possibly as support just below $35,000 if a 30-60% technical retrace manifests before continuing the current short-term uptrend.
Disclosure: Reuben Jackson held no position in any of the stocks mentioned in this article at the time of publication.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
