Bitcoin at $29,500: Sell-Off or Surge?
Bitcoin's price has remained stable within a narrow range for a considerable period, as buyers and sellers contend over vital support and resistance levels. Although the recent surge beyond $29,500 has given rise to optimism among buyers, they have yet to amass sufficient impetus to propel the value upwards.
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Bitcoin at $29,500: Sell-Off or Surge? Bitcoin Struggles To Break Above Key Moving Average
Material Indicators, a prominent market analysis firm, suggests that for the BTC market to experience a bullish breakout, the coin needs to print candles above the 100-week moving average (MA). However, BTC has yet to test this level, and the current range has been difficult for bulls to maintain. Bitcoin at $29,500: Sell-Off or Surge?
Over the past eight days, BTC has tested the crucial support level of the 50-day MA, which has managed to hold. However, the bulls have faced a challenge due to resistance at $29,500.
If the current level cannot be cleared, Material Indicators predicts that BTC may fall to $28,300, which is seen as the last line of defense. The main concern for investors is whether the coin will rebound from the $28,000 zone or continue to drop to $25,000 and beyond. These scenarios are all possible, but the timing and order of events remain uncertain.
As the monthly closing approaches, the BTC market is expected to experience some volatility, causing traders and investors to closely watch the market indicators and price movements.
BTC’s Store Of Value Narrative Solidified
The recent changes in Bitcoin's trading volume structure have sparked a debate among cryptocurrency investors and traders. According to Crypto Quant, the ratio of Spot vs. Derivatives volume has decreased from 35% to 6% since January 2023, leading to a new era of low volatility in the cryptocurrency market.
This decrease in spot volume indicates that investors are holding onto their Bitcoins instead of selling them, as Bitcoin is now considered a valuable asset, similar to digital gold.
This trend is reflected in the BTC: Binary Coin Days Destroyed (CDD) chart, which shows that there have been no active sales among the cohort of long-term holders (LTHs) since the beginning of the year.
The weekly trading volume of Bitcoin, measured by the total Simple Moving Average (SMA)-7d, has decreased from 2.5 million BTC in March to less than 600 thousand BTC in July, indicating a reduction of over 75% during this period. While some may view this as a crisis, Crypto Quant sees it as a sign of the cryptocurrency market maturing and becoming more stable and predictable. However, this trend could lead to significant changes in the Bitcoin market, including a reduction in liquidity due to the decrease in spot volume, which may increase the demand and price of Bitcoin. The cryptocurrency market currently lacks a new wave of optimism, and the question is, where will it come from? The answer may lie in the growing institutional interest in Bitcoin and other cryptocurrencies. Major financial institutions such as Fidelity, Blackrock, and Morgan Stanley have recently applied for Bitcoin Spot Exchange-Traded Funds (ETFs), which could bring a new wave of optimism to the cryptocurrency market, increasing demand and prices.
Bitcoin is facing challenges in its attempt to regain its 50-day moving average (MA) as a support level instead of being another resistance line. As of the time of writing, Bitcoin is trading at $29,200, representing a slight 0.6% decline over the last 24 hours.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.