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‘$31K Wasn’t the End’ – 5 Things to Know in Bitcoin This Week

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June 5, 2023
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‘$31K Wasn’t the End’ – 5 Things to Know in Bitcoin This Week
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Bitcoin (BTC) started the second week of June in familiar territory, but a breakout is coming, investors say.

After a quiet weekly close, BTC/USD is firmly within its established trading range, while under the hood, market participants are preparing for some dramatic moves.

This has been a long time coming, and for seasoned traders, the signs are pointing to volatility returning bullish.

With little in the way of macroeconomic triggers due this week, attention is turning elsewhere for signs of what BTC price action might do in the short term.

On-chain analysis provides other interesting insights, reinforcing the idea that the only “boring” part for bitcoin at present is the spot price.

Cointelegraph looks at the key factors at play as BTC/USD hovers around $27,000 for another week.

Weekly close preserves major trend line

BTC/USD may not have inspired much from its latest weekly close, but some popular traders are seeing new grounds for optimism.

Despite remaining firmly within its narrow trading range, as confirmed by Cointelegraph Markets Pro and trading viewChances of a breakout towards $30,000 are increasing.

BTC/USD 1-day candle chart on Bitstamp. Source: TradingView

“Looks Like It’s Only A Matter Of Time Until Bitcoin Finally Breaks That 30k Level Once And For All,” Trader Jelle wrote In part of his latest analysis.

Jelle, like others, noted that the 200-week moving average (MA) – a key support line – remained intact.

BTC/USD annotated chart. Source: Jelle/Twitter

Various support structures covering the daily time frame were also intact on the radar of trader and analyst Rekt Capital.

“So far, so good,” he summarized, potentially invalidating a bearish “head and shoulders” structure from last week.

one extra tweet mentioned “Successful retest” of support in the offing.

“BTC Breaks Out of Head and Shoulders Pattern in May. But Classic Whipsaw Action Around the Neckline,” Still Trading Account Game of Trades accepted,

“The pattern remains valid until the price moves above the right shoulder.”

Taken together, the chart only gave a potential downside target of $24,000 for BTC/USD due to a head-and-shoulders pattern.

Others look for lower momentum, such as trader Crypto Tony, who sees $25,300 as a potential destination, subject to it remaining unchanged at $28,350 as resistance.

Macro lull comes as traders eye dollar rebound

In an unusual week of calm for traders, June 5–9 will see little by way of macroeconomic data coming from the United States.

Putting the debt ceiling debacle behind, the next potential volatility catalysts will come in the form of macro reports for May, such as consumer price index (CPI) prints; However, these are not due for another week.

With this, the focus is shifting to oil production cuts from OPEC+ members as prices continue to slide despite the current cuts in production.

US Dollar Index 1-day candle chart. Source: TradingView

Meanwhile, a more direct potential headwind for bitcoin and crypto comes in the form of the US dollar.

The greenback’s strength has been building a rebound since early May, and since then, the US Dollar Index (DXY) – traditionally inversely correlated with risk assets – has risen about 3.5%.

Popular analyst Matthew Hyland noted a rising Relative Strength Index (RSI) score for DXY on the weekly time frame.

Fellow trader Skew marked 104.7%, the current June high, as a key level to close above to form a bullish DXY trend.

“EU closed strong and moving higher in the early trading session,” he said. commented Same day

“If USD closes above $104.7, I will consider it as USD strength. So far it looks risky but we will see later.

In the weekend, meanwhile, TraderSZ It has been told DXY as “bullish until proven otherwise”.

Stocks make a case for bullish cryptocurrencies

The debt ceiling resolution had an immediate impact on equities, but crypto markets have largely failed to copy their enthusiasm.

That could still change, market participants argue, as the S&P 500 hit a 10-month high.

“US House passes key debt ceiling deal, launching #SP500 to its highest price since August. Altcoins like $LTC, $LEO and $FGC jump today,” research firm Sentiment wrote On 2 June.

“With crypto equities lagging behind, there may soon be some $BTC catch-up time.”

Crypto vs Macro Comparison. Source: Sentiment/Twitter

An accompanying chart also tracked a “rebound” for gold, but it was short-lived, with a retracement setting up to mark the new week.

As Cointelegraph reported, others were also eyeing a positive correlation between bitcoin and a resurgent S&P 500.

Bitcoin holders comfortably profit

“It’s easy to ‘feel’ that the bitcoin rally is over, but the facts say it isn’t,” popular technical analyst Cryptocon wrote in findings last month.

At the time, BTC/USD was about $1,000 above current levels, but enthusiasm was equally low.

Cryptocon was analyzing the state of bitcoin holder profitability using the net unrealized profit/loss (NUPL) metric created in 2019 by entrepreneur and analyst Toor Demeester and others.

For the past several months, NUPL has been practically stable around a value of 0.25, indicating that overall, BTC supply is marginally “in the black”.

NUPL measures the difference between unrealized profit and unrealized loss. This is calculated by collecting unspent transaction outputs (UTXOs) and comparing them to how many coins there were when they last went on chain.

“Any value above zero indicates that the network is in a net profit position, while a value below zero indicates a net loss position. In general, the further NUPL moves from zero, the market trend is up and The closer the bottom is,” analytics firm Glassnode Explained in an introduction.

Cryptocon now says that while remaining quiet in recent months, NUPL has given an uptrend retest, which gives reason for confidence.

“31k wasn’t the end, hope you’re ready!” He concluded In an update later this week.

The accompanying chart of NUPL shows its behavior versus investor sentiment at various stages over the past 10 years.

Largest bitcoin whale at center of “dichotomy”

On the subject of investor sentiment, the current view of the market varies greatly between classes of holders.

RELATED: Bitcoin ‘Big Move’ in July After March $30K Push – Latest Analysis

As noted By Glassnode, most remain risk-off on bitcoin; Since May, selling has dominated despite a lack of capitulatory events.

It appears that the one exception is the largest class of bitcoin “whales”.

Uploading a chart of adjusted accumulation versus distribution by cohort, Glassnode showed that wallets holding at least 10,000 BTC were adding to their positions while everyone else was de-risking.

“An interesting paradox persists in the bitcoin accumulation trend score, as the largest whales (>10K BTC) continue to accumulate aggressively, while all other major groups experience massive distributions,” the researchers commented.

The last accumulation phase from these “mega whales” was in late 2022, after BTC/USD started its 2023 rebound week.

The whales then halted in mid-January, entering their own distribution phase before moving back into accumulation in May.

Bitcoin trend accumulation score by cohort chart. Source: Glassnode/Twitter

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This article does not constitute investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making decisions.