The spring is being compressed further as Bitcoin swings continue to diminish. Since the commencement of active trading in New York, the lower bound of the trading range has shifted to $29K, where the BTCUSD has found support. The top bound of the constructed triangle has advanced to $30.5K, up 1.8 percent from current prices of $30K in the last 24 hours.

Bitcoin Consolidation Uninspiring

As range adherence continued, Bitcoin (BTC) momentarily returned to $30,000 before the May 25 Wall Street open.

While it may appear dull at first glance, Michal van de Poppe saw Bitcoin on short periods as a source of renewed interest, predicting a run to near $33,000 next.

He told his Twitter followers:

“Bitcoin broke through $29.4K and ran towards the next resistance zone, if we hold $29.4K, we’ll be good towards $32.8K. Finally.”

The price of Bitcoin is consolidating, which is equally perilous for bulls and bears. Both gain liquidity and become accustomed to existing prices over time.

On a market-cycle level, there’s a good likelihood that the present consolidation will end with a collapse of the lower boundary and the liquidation of stop orders, confirming the initial downside momentum.

Related reading | Investors May Expect Downside For Bitcoin And Ethereum Market For The Next 3 Months

The bearish prognosis is fueled by monetary policy tightening and declining economic development, which causes retail investors to withdraw funds from bitcoin in favor of spending. It doesn’t help that people’s hopes of getting rich quick with cryptocurrencies aren’t coming true, as bitcoin is now valued the same as it was in early 2021.

BTC/USD trades below $30k. Source: TradingView

Investing in the business is becoming more sophisticated, moving beyond naive buy-and-hold strategies. Investors are pulling money out of bitcoin and putting it into blockchains that enable smart contracts, such as Cardano and Polkadot, according to CoinShares. Last week, crypto funds lost $141 million in net capital outflows.

The ECB warned that the high correlation between cryptocurrencies and stock markets is common during times of economic hardship, and that digital assets will no longer be allowed to diversify investment portfolios.

Related reading | Institutional Investors Seek Safe Haven In Crypto Products Amid Market Uncertainty

Featured image from iStockPhoto, Charts from TradingView.com

Bitcoin on-chain data shows exchanges this week have observed the largest inflows since July 2021, taking the price of the crypto to $33k.

Bitcoin Exchange Inflows Spike Up To Highest Value Since July 2021

As pointed out by an analyst in a CryptoQuant post, the BTC exchange inflows have observed a sharp increase recently.

The “all exchanges inflow” is an indicator that measures the total amount of Bitcoin moving into exchange wallets.

When the value of this metric rises, it means an increasing number of coins are moving into exchanges. Such a trend may be bearish for the price of the crypto as investors usually deposit their BTC to exchanges for selling purposes.

Related Reading | TA: Ethereum Bears Aim Big After Recent Breakdown Below $2.5K

On the other hand, low values of the indicator suggest that not much selling on exchanges is going on right now. This trend, when prolonged, can prove to be bearish for the value of the coin.

Now, here is a chart that shows the trend in the Bitcoin exchange inflows over the past several months:

Looks like the value of the metric has shot up recently | Source: CryptoQuant

As you can see in the above graph, the 7-day average value of the Bitcoin exchange inflow has observed a spike this week.

The current value of the indicator is the highest it has been since July of last year, around when the coin bottomed around $29k.

Related Reading | Terra Beats Tesla As Second-Largest Corporate Bitcoin Holder After $1.5B Purchase

Looking at the chart, it seems like in the last few months whenever the inflow has spiked up, the price has also declined with it.

This time as well it looks like the heavy selling on exchanges has played a part in the current plunge of Bitcoin below $33k.

The metric’s value still looks to be rising, so it’s possible the coin may observe further decline in the near term, until the 7-day MA inflow tops out.

BTC Price

At the time of writing, Bitcoin’s price floats around $32.9k, down 14% in the last seven days. Over the past month, the crypto has lost 22% in value.

The below chart shows the trend in the price of the coin over the last five days.

The price of BTC seems to have plummeted down over the last few days | Source: BTCUSD on TradingView

Bitcoin’s seemingly endless consolidation looks to have finally broken down as the coin has observed some sharp downtrend in the past week.

At the moment, it’s unclear whether the crypto is nearing a bottom or if more decline is coming. If the inflows continue to increase, then the latter scenario is more likely to play out.

Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com

Bitcoin (BTC) suffered steep losses over the past week, bringing the token to its lowest levels this year.

The world’s largest cryptocurrency is now trading around $33,000- its lowest level since July 2021. The token has slumped nearly 14% in the past week, and is down over 50% from a record high hit in November.

A bulk of BTC’s losses happened in tandem with U.S. stock markets, particularly the Nasdaq index. It is this correlation that shows that BTC is likely set for more sharp losses in the coming days.

U.S. stock futures indicate heavy losses

U.S. stock futures, which indicate how Wall Street is expected to perform, are currently down between 1.2% and 2%, according to data from CNBC. Nasdaq futures in particular are performing the worst.

BTC has largely tracked the Nasdaq this year, and is so far showing no signs of decoupling. With the Nasdaq set to notch heavy losses on Monday, it seems likely that BTC will follow suit.

BTC’s correlation to equities also appears to have strengthened in 2022. During its selloff last week, the token marked its biggest intraday losses just around the Wall Street open (9:30 AM EST). This trend has also seen investors treat the token more like a high-risk asset, as opposed to a digital safe haven.

The Nasdaq Composite index is down about 23% this year. BTC has fallen slightly more, at around 27%. Both losses are driven by two main factors- fears of rising inflation, and the expectation that the Federal Reserve will sharply hike interest rates.

How low will BTC go?

With the Nasdaq positioned for a near 2% loss, BTC could also fall in a similar magnitude. The token could likely finish Monday at around $32,000 to $30,000.

While some analysts note that the token is in a price range that heralded major reversal in 2021, BTC has few catalysts to spark a recovery. Veteran investor Peter Brandt recently said he expects the token to go as low as $28,000.

BTC’s losses have caused similar drops across most of the crypto market. Traders now appear to be moving out of risky assets, and into safer plays such as stablecoins, or even select equities.

With more than five years of experience covering global financial markets, Ambar intends to leverage this knowledge towards the rapidly expanding world of crypto and DeFi. His interest lies chiefly in finding how geopolitical developments can impact crypto markets, and what that could mean for your bitcoin holdings. When he isn’t trawling through the web for the latest breaking news, you can find him playing videogames or watching Seinfeld reruns.
You can reach him at [email protected]

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

Bitcoin has been trading around its current levels for several days, leading to an apparent shift in sentiment across the crypto market. As BTC’s price trend to the upside after the U.S. Federal Reserve FOMC meeting, there seems to be an increase in optimistic on the crypto market.

Related Reading | TA: Bitcoin Faces Hurdle, Why BTC Could Resume Downtrend

In the short term, our Editorial Director Tony Spilotro has identified a TD Sequential buy signal on the 12-hour chart. As seen below, he highlighted a 13-buy setup with a trend to the downside which has been identified for some market participants as a bear flag.

On this timeframe, larger investors could be “baiting” retail into trading the bear flag. However, the TD Sequential suggest these investors could be entering a trap, as it suggests a short squeeze which could play out as soon as today’s daily close, according to Tony’s analysis.

Data from IntoTheBlock records major resistance level for Bitcoin bulls between $37,500 to $38,500. There are over 822.210 BTC which were purchased by 1.06 million addresses which could be seeking to take profit. A successful break above these levels could push BTC back to the $42,000 price mark.

Investment firm QCP Capital supports the short squeeze thesis due to the extend of the current bearish price action. The firm presented two key reasons on why Bitcoin and the crypto market could see a relief in February.

First, the U.S. FED has a “light agenda” for the coming month until 17 March. On this date, the financial institution could announce a decision on interest rates and a change in monetary policy. However, a 25 basis points (bps) seems to be priced in.

This could contribute with a relief in the crypto market, unless the FED decides to implement a more aggressive monetary policy. In any case, March could mark a turning point for Bitcoin and traditional markets, as investors will have their eyes on the FED.

The Long-Term Perspective For Bitcoin, More Downside Likely?

Historically, QCP Capital Noted, February has been a bullish month for Bitcoin which records over 10% in average profits since 2015, with exception of 2020. The bearish price action at the time could have been driven by the COVID-19 pandemic which eventually also contributed with that year’s rally.

However, the firm expects 2022 to be a tough year for the crypto market due to significant macro-economic factors, mainly the actions to be adopted by the U.S. FED. The time at which these changes will be implemented, remain the most important factor and will have an important impact for either bulls or bears. QCP said:

(…) while we think a short-term squeeze higher is likely, we are not overly optimistic for 2022. We remain of the view that crypto prices will remain under pressure and struggle to break the all-time highs this year (…). Any indication of QT (Quantitative Tightnening) starting earlier than expected would be taken very badly by the market.

Related Reading | Go With The FED, Why Bitcoin Could Benefit From Interest Rate Hikes In 2022

As of press time, Bitcoin trades at $37,800 with sideways movement in the past 24 hours.

Bitcoin broke out in a feeding frenzy during the January 24 afternoon, raking up over $37K after falling to its lowest point in the same morning. It’s almost as if they’re mirroring each other’s moves.

Bitcoin shot back up above $36,000 Tuesday morning after a day of heavy trading that saw the price drop below 33K for the first time since July 2021. Monday afternoon, it crossed $37,000 was staying pretty stable around 35k with some small increases here and there. 

The crypto world has seen a lot of volatility over the last few years, but it’s still surprising when prices drop 50% or more. It has happened three times since 2018 alone! And this latest sell-off was no exception; from April through July 2019, Bitcoin fell 52%.

Cryptocurrencies have experienced major selloffs across the board, with cryptocurrency-related stocks being no exception. Analysts say that one primary driver of this trend is former Federal Reserve chairwoman Janet Yellen’s plan for stimulus removal and higher interest rate policies, which has negatively impacted many tech-related companies in recent months. For example, the Nasdaq has fallen 12% since January 1 alone.

“The Fed is currently buffeting the crypto market,” says Martha Reyes, head of research at Bequant. “This industry has been proliferating, and it’s not surprising that investors are taking risks with their capital.”

The decreased interest in crypto by retail investors is a sign that this market may have reached its peak. Glassnode, a blockchain data research firm, suggested there were two main reasons for the decline: regulatory uncertainty and low performance last year – both factors which will probably continue into 2022 as well.”

Bitcoin vs New Digital Assets

With the rise of NFTs, people are now more interested in investing their money into these new digital assets rather than Bitcoin. So it’s no wonder that people are starting to search for information on these non-fungible tokens. Google searches have shown a steady increase over last year, which is likely why we see more interest from investors worldwide as they seek out trends before others do.

Cryptocurrencies are down across the board, but some coins have fallen further than others. For example, ether is down 50% from its last high point, while Solana and Shiba Inu cryptocurrencies based on memes experienced even steeper losses with 64% and 74%, respectively.

Related Reading | Despite Decline In Bitcoin Price, Market Remains Greedy

Since November, the crypto market has lost about 44% of its value, with $1.65 trillion pulled down by widespread selling in both Bitcoin and other coins across the board.

Joel Kruger, a currency strategist, said,

“It makes sense to me for broad crypto to get hit hard. It’s all about innovation, which should correlate with risky assets.”

Crypto inevitably gets hit hard when innovation increases and risky assets follow suit. Sure enough, ether has followed this trend as well; it’s almost like an index for all these projects on ethereum – including NFTs, games, decentralized finance initiatives, or smart contracts – to see how they stack up against each other.”

The moves come as a surprise to some investors and analysts. Ryan Volden, an analyst from JPMorgan, predicted that Bitcoin could reach $146,000 in the future.

Traders To keep an eye on BTC $30K Level

Traders are focusing on $30,000 as a significant level for multiple reasons. First, that number represents the low point of last year’s bear market, and it also opened up close to where Bitcoin was trading in 2021 when we first saw prices fall during that period – which means there is some hope left.

It’s not just your investments that are at risk. For example, suppose Bitcoin falls below $5K. In that case, it will put Bitcoin prices into their 2020 levels and turn every investor who bought Bitcoins in recent months, as well as all those risking money on crypto markets, into losers.

With Wall Street panicking and a sell-off of Bitcoins reaching new heights, it’s essential to keep an eye on the $30k level. If this becomes unstable, more people may end up selling their coins, leading the market back down again.

                   Featured image from Pixabay, chart from TradingView.com

Bitcoin has jumped back from its critical support zone at $31,200 and trades at $31,835, at the time of writing. The first cryptocurrency by market cap has seen an increase in selling pressure during this week. Experts predict another capitulation event, but they can’t agree on the timing and volatility.

Any move to the downside or upside could be built around a crab-like price action with long consolidation periods.

Popular trader and analyst Byzantine General noted the flip in funding rates on exchange BitMex and the increase in short positions. This is usually taken as a bottom sign as liquidity piles to the upside, giving market makers the opportunity to push the prices to those levels to drive further plays. The trader said:

Cause and effect lads. Nothing ever bottoms out when majority retail is long (or short) on it. Some signs of short aggression now, but no spot bid to blow them out so the shorting is just more pressure. Not sure what’s next. Mebeh 30k, futs backwardation, them omega squeeze.

As seen in the chart below, monitor KingFisher has recorded a lot of liquidity pools around $33,000 and $34,000 with indications of rising volatility. Thus, it’s possible to assume that big players have more incentives for Bitcoin to take the liquidity around these levels.

Additional data provided with CryptoQuant indicates that over 14,550 BTC have entered exchange platforms. As seen below, this spike in exchange inflows has historically been followed by small moves to the upside and larger drops. A similar scenario could be in play.

Two Potential Scenarios For Bitcoin As The Market Trends To The Downside

Pseudonym trader Daan Crypto believes Bitcoin is stuck in the low of the downtrend channel. The first cryptocurrency by market cap seems weak, Daan said, and could test new lows in the $30,000.

In case of a retrace to those levels at $30,000, the trader expects BTC’s price to follow two scenarios. First, the cryptocurrency could continue to break below its critical support zone and beyond its yearly open at around $29,000.

In this case, the trader expects Bitcoin to drop below the area between $23,000 to $26,000. This could be an ideal zone to take a long position.

Otherwise, if Bitcoin holds support close to its yearly open, the former scenario could be invalidated, and the cryptocurrency might retake the $30,000 level. This could set the stage for a more convincing recovery to Bitcoin’s previous highs.

On the other hand, pseudonym trader Rekt Capital believes Bitcoin could be forming a triple bottom. The trader expects a daily close above $31,500 could be a bullish signal with a price target up at $38,900.

The Triple Bottom scenario for #BTC is still very much alive at the moment$BTC #Crypto #Bitcoin pic.twitter.com/lW6xVa5WYh

— Rekt Capital (@rektcapital) July 16, 2021