Keep falling ! Bitcoin experienced a drop of up to 10,000 points last week, from a high of $63,861 to a low of $53,485. Although it rebounded over the weekend, at 5 o'clock this morning, Bitcoin ushered in a new wave of decline, falling from $57,000. 54,260 US dollars, now quoted at about US$55,500.
46,000 Bitcoins flowed out of exchanges on 7/5
Will Bitcoin continue to fall, or is it about to rebound? CryptoQuant analyst Woominkyu wrote in the afternoon that the largest Bitcoin withdrawal in 2024 occurred on July 5 (last Friday), with more than 46,000 BTC flowing out of the exchange that day.
Usually investors regard this phenomenon as a bullish signal, because it means that holders may want to hold BTC for a longer period of time rather than sell, so they move the tokens to personal wallets for safekeeping.
On the other hand, Cointelegraph also posted on the social platform X earlier today that there are 6 key indicators showing that Bitcoin bulls still have the upper hand:
Bullish divergence boosts Bitcoin rebound prospects
The article stated that there are two main reasons for the current decline of Bitcoin. Mt. Gox repaid 140,000 Bitcoins to customers and the market selling panic caused by the German government’s liquidation of Bitcoins.
However, as prices fall, the divergence between the price decline and the rise in the relative strength index (RSI) gradually becomes larger. This divergence usually indicates that selling pressure is waning. In technical analysis, this situation usually signals a potential price reversal or a slowdown in the current downward trend.
Bullish hammer, oversold RSI
Two other classic technical indicators support a bullish reversal scenario. First, Bitcoin formed a bullish hammer pattern on July 5, which is characterized by a daily K-line entity with a longer lower shadow and a shorter upper shadow. A similar situation occurred in May.
Secondly, Bitcoin’s daily RSI value is close to its oversold threshold of 30, which usually signals a consolidation or recovery period. Analyst Jacob Canfield predicts that this indicator may indicate a rebound trend, with Bitcoin expected to rise back to around $70,000.
Wall Street Betting on Rate Cut in September
Bitcoin’s ability to resume its bull run in the coming weeks further improves as the chances of a rate hike in September increase.
According to the latest employment data released by the U.S. Bureau of Labor on the 5th, non-farm employment in April and May was revised down by a total of 111,000 people, indicating that the hot employment in the United States is continuing to slow down, adding another layer of energy to the United States' road to combating inflation. confidence.
In addition, according to CME FedWatch data , the probability of an interest rate cut in September is 70.8%, much higher than the 57.9% predicted at the end of last month.
Bitcoin ETF investors return after July decline
Another bullish indicator for the Bitcoin market is the resumption of inflows into the U.S. Spot Bitcoin ETF after two consecutive days of net outflows.
On July 5, when the United States reported weak unemployment data, Bitcoin spot ETFs attracted a total of $143 million in net inflows, indicating that risk sentiment among Wall Street investors was rising.
U.S. money supply expands again
More clues for Bitcoin's rise come from the recent rise in the U.S. M2 money supply. M2 includes cash, checking deposits and easily convertible quasi-currencies such as savings deposits, money market securities and other time deposits.
As of May 2024, M2 money supply has increased by approximately 0.82% year-on-year, decreasing from a peak of 4.74% in October 2023 to approximately 3.50%.
Bitcoin miner capitulation hints at Bitcoin price bottom
The Bitcoin miner capitulation indicator is close to levels seen when the market bottomed after the FTX crash in 2022, suggesting that Bitcoin may have already bottomed. Miner capitulation occurs when miners reduce operations or sell some of their mined Bitcoins and reserves to stay afloat, earn income, or hedge their Bitcoin risk.
Market analysts pointed out that there have been multiple signs of capitulation in the past month, with Bitcoin price falling from $68,791 to $53,550. Notably, Bitcoin’s computing power has declined significantly – total computing power fell by 7.7% to a four-month low of 576 EH/s.
The decline in hash rate indicates that some miners are scaling back operations, reflecting the financial pressure on the mining community following the halving.
As weaker miners exit the market or scale back operations, more competitive miners will earn greater profits, which may stabilize their operations and reduce the need to sell Bitcoin.
Extended reading: More Bitcoin mining machines fell below the shutdown price, and the divine fish shouted "The opportunity is coming again." What did he see?
