Bitcoin appears to be forming a new range around its current levels as the cryptocurrency fluctuates between $18,600 and $21,000. The price of BTC has recovered during today’s trading session and could see some volatility due to Independence Day, July 4thth.
At the time of writing, Bitcoin is trading at $19,500 in the past 24 hours with a profit of 4%.
Data from analyst Ali Martinez shows an increase in Bitcoin holdings from 100 to 10,000 BTC addresses. These whales have held more than 30,000 bitcoins.
Additionally, Martinez recorded over 40,000 BTC leaving the cryptocurrency exchange. The less bitcoin supply these venues have, the less it will sell on the market.
These market dynamics translate into price action this weekend.In addition, material indicators Record Increased buying pressure from investors with high bids (purple in the chart below) coincides with short-term whale accumulation.
These whales have the “most influence” on BTC’s price action and could hint at more gains. Materials indicators also recorded bullish momentum in price action over the weekend.
In fact, with the exception of retail investors and large whales with over $1 million in buy orders, every investor class appears to be buying BTC’s price action, as shown in the chart below.
additional provided data by Santiment has recorded a significant increase in the number of long positions across trading platforms. This coincides with a US holiday, but that’s not necessarily good news for these carriers:
at 4 amth In the US in July 2022, #longs saw a surge on exchanges in the first hour. Trader optimism is often associated with holidays, which means whales need to be more cautious about punishing over-eager.
What’s causing the pain in the entire Bitcoin market
There are some signs of possible bullish price action in the near term, but the increase in long positions warrants caution. The macroeconomic outlook seems less optimistic and could bring more pain to Bitcoin and other cryptocurrencies.
Trading arm QCP Capital claims its bullish outlook is “fading” as the Federal Reserve intends to slow inflation in the country. To that end, the financial institution has been raising interest rates, wreaking havoc on global markets.
Initially, some experts thought the Fed would attempt a “soft landing,” reducing inflation without hurting the economy. That possibility may have been ruled out as the Fed finds itself between a rock and a hard place. QCP wrote:
Fed Governor Williams said “the need to get real interest rates above zero”. That means the Fed is likely to ignore recession risks and will continue to aggressively hike rates to reach its 3.5%-4% target by year-end.
Related reading | TA: Bitcoin is still in a downtrend, what could trigger a surge
In addition to this, financial institutions have been reducing liquidity in global markets while shrinking their balance sheets. This will only herald more downside for the crypto market.
8/ Remember that cryptocurrency bull cycles are driven by balance sheet expansion. A contraction of this magnitude would certainly have a dampening effect on prices.
— QCP Capital (@QCPCapital) July 4, 2022