The End of Consolidation in Bitcoin is Nearing
Many altcoins were in the news this month for the impressive rally they had. Yet Bitcoin was not a part of this hype; it has been around the $9,000 mark for almost a quarter. That said, the fundamentals and technicals are turning towards the Bitcoin market.
Here are some impacting factors of Bitcoin that could drive the Bitcoin prices to a fresh swing.
The Increasing Consolidation
In May, the Bitcoin pushes, which used to be 15% weekly, have now dropped to not more than 5%. In other words, volatility is significantly reduced.
The equity market had a dull start this week, as the major stocks were a little down. Bitcoin, which has been correlating with these equities since the beginning of the pandemic, unsurprisingly, saw the same trajectory moving in a narrow range.
However, the cycles of higher lows and lower highs are showing signs of breaking through anytime this month. In fact, some analysts predict the gigantic move to happen later this week.
Futures Show Positive Trends – on Altcoins, Not Bitcoin
One of the biggest cryptocurrency exchanges, Binance, reported that the demand for futures products has significantly grown for altcoins while it has been tapering off in the case of Bitcoin.
As per statistics, in July, Binance’s perpetual futures volume surged to $5.1 billion, a rise of 150% from $2 billion.
The outbreak in demand for altcoins in the last few months has shown a decline in the capitalization dominance, which indeed is a matter of concern.
“…Bitcoin volatility could be extraordinary to the upside” – Morgan Creek Digital Partner
Jason Williams, Morgan Creek Digital executive, says the overextended consolidation of Bitcoin could come to an end in just 24 hours.
In a recent tweet by the executive, he proclaims to his whopping 41,000 Twitter followers that Bitcoin is due for a big run to the north, as the price has approached the apex of the popular ascending triangle chart pattern.
Precisely, his tweet read, “This feels like a little World Cup of sorts. Bitcoin could break out on or about the 22nd. I don’t think I would want to be on the sidelines going into this… Bitcoin volatility could be extraordinary to the upside.”
On a similar note, Ethereum Jack, a crypto analyst, expects the largest cryptocurrency to explode within a week or so, after the Bitcoin’s spot volume bottomed-out to a level which preceded massive price expansion.
Bitcoin Difficulty at All-Time Highs
The network difficulty for Bitcoin touched the all-time highs this week. The record high value of 17.35 trillion has made it extremely challenging for Bitcoin miners to profit. However, the overall network hashrate of Bitcoin has consistently stayed above the 120 exhash/second zone.
Every network has a block difficulty, and the verified blocks should have a hash below a specific target. Difficulty is the effort required to solve the mathematical puzzles on the Bitcoin blockchain. Essentially, when the difficulty decreases, it becomes easier to find the blocks on the BTC network. Conversely, the higher the difficulty, the higher the effort needed to solve the puzzle.
Even after increasing difficulty, the overall Bitcoin global hashrate has sustained above the 120 EH per second range.
Technical Standpoint on Bitcoin
As pointed out by Jason Williams, the prices have been consolidating for three months since the beginning of May 2020. While altcoins surged this month, few making all-time highs, Bitcoin price movement got narrower.
On the bright side of things, the overall trend of the market is technically still bullish. The market holding around $7,500 during the start of 2020 broke above and made a high up to $ 10,000. Thus, on a bigger picture, the market is pulling back (retracing) to continue its trend north.
The market having extremely low volatility over the past few weeks indicates that it is preparing to shoot in one direction.
What to Expect?
The Bitcoin price has reached the apex of the ascending triangle. At the time of writing, the market has pushed through the upper trend line and is trading at a level of $9,400. This is an excellent sign of bullishness as the prices failed to fall from $9,300, disrespecting the chart pattern.
If the price sustains above the $9,300 mark, the market is expected to reach at least up to $9,700, as it is a potential supply level.
That said, in consideration of the fundamentals and the higher time frame technicals, the Bitcoin prices could inch higher and higher and eventually break through $10,000 as well.
- $51 + 2.4%
- $51 + 2.4%