Best Monthly Profits Since October 2021 - 5 Things to Know in Bitcoin This Week

Best Monthly Profits Since October 2021 – 5 Things to Know in Bitcoin This Week – Mail Bonus

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Bitcoin (BTC) starts the new week and the new month on a cautiously positive basis after protecting important levels.

After an intense July, where macro factors provided significant volatility, BTC price action managed to provide both a weekly and monthly candle in favor of the bulls.

The road to some form of recovery continues, and at some point in recent weeks it looked like Bitcoin would suffer even harder from its 40% loss in June.

Now, however, there is already a sense of optimism among analysts, but one thing remains clear – this “bear market rally” does not mean the end of the tunnel just yet.

As Summer 2022 enters its final month, Cointelegraph examines potential market triggers in play for Bitcoin as it sits near its highest levels since mid-June.

Closing price pulls back trends in the market

In terms of Bitcoin’s performance in July, things could have been much worse.

After losing nearly 40% in June, BTC/USD managed to close last month with a respectable 16.8% gain, according to data from analytics resource Coinglass.

BTC/USD monthly returns chart (screenshot). Source: Coinglass

While this gain at one point exceeded 20%, July’s percentage is still the best since October 2021 – before the most recent all-time high of $69,000 was reached.

With solid foundations in place, the question among analysts now is whether and for how long the party can continue.

“First monthly close in the green since March,” popular trader and analyst Josh Rager answered.

“After a monthly close above the 2017 all-time high from the last session, the price is slowly moving up. Looking good so far and even if it’s a ‘bear market’ I’m happy to buy dips now.”

Others were more cautious, including fellow trader and analyst Crypto Tony, who noted that recent local highs just above $24,000 still acted as unchallenged resistance for the day.

“I am looking for a breakdown of this Bitcoin pattern and am short while we are below the $24,000 supply area which we rejected,” he said. confirmed to Twitter followers.

Nevertheless, the weekly and monthly close sealed some important levels as support for Bitcoin. Specifically, the 200-week moving average bounced off resistance on the weekly chart, and BTC/USD held its ground, data from Cointelegraph Markets Pro and TradingView show.

In its latest weekly newsletter, published last week, Blockchain infrastructure and mining firm Blockware also noted that the retracement of the 180-period exponential moving average (EHMA) at just under $22,000 on the monthly chart is “quite bullish.”

“The monthly also appears to be retaking the 180-week EHMA, a level we’ve been talking about for the past few months as a macro rally zone for BTC. This also closes on Sunday evening EST,” wrote leading insight analyst William Clemente.

“If it recovers, it would be quite bullish as a failed breakdown/breakout is a strong signal.

BTC/USD 1-week candlestick chart (bitstamp) with 200-week moving average. Source: TradingView

Macro calls for cold for August

The macro picture that begins in August is a relief mixed with a sense of disbelief about how the rest of the year might unfold.

In the short term, US stocks survived last month’s Central Bank-induced volatility and ended July on a high. As Cointelegraph reported, calls for a further rally in the stock are growing, something that can only be good news for the highly correlated crypto market.

Analyzing the state of commodities, the popular Twitter account Game of Trades predicted that oil would soon lose ground and that this would have a noticeable effect on US inflation.

Currently at more than forty-year highs, the consumer price index (CPI) is responsible for the Fed’s rate hikes, which pressure risk assets across the board. A turnaround in inflation and thus central bank policy could thus quickly turn the tables.

“Big sellers took part in oil on Friday,” one entry from the weekend read.

“Oil looks set to crash, taking the CPI with it.”

However, the global picture when it comes to commodities is not so simple, with macro expert Alex Krueger warning to the contrary that the energy crisis in Europe has not yet played out in market pricing.

For Bitcoin, the current recovery is more of a “bear market rally” than a true return to strength.

“Yeah, it’s a bear market session … for now,” Krueger wrote.

“The thing is, if inflation comes down fast enough, which is possible, and the energy crisis in Europe isn’t exacerbated by a harsh winter, also possible, this could end up being the start of a bull market.” Nobody knows right now.”

Krueger added that the status quo should remain until “at least until the end of August” when new Fed events affect the market.

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In order of importance, he listed the key interest rate decision in September, the CPI in September, the Federal Reserve’s Jackson Hole summit on August 25 and the August 10 consumer price print for July.

As for US dollar strength, the US dollar index (DXY) hit near-month lows during the day, standing below 106.

For Game of Trades, the index was more important than the numbers. After the parabolic uptrend, a clear reversal was now visible on the DXY daily chart.

“DXY has broken its parabola. There is only one way a broken parabola ends,” it comment.

US dollar index (DXY) 1-day candlestick chart. Source: TradingView

The RSI raises questions about price floors

Turning to blockchain tokens, a rebound in one of Bitcoin’s fundamentals hasn’t been enough to convince analyst Venturefounder that the BTC price bottom has arrived.

Zoom out to multi-year review and compare BTC/USD across market swings, the popular content author argued that the Bitcoin Relative Strength Index (DXY) is still depressed after the April 2021 peak.

The RSI measures how overbought or oversold BTC/USD is at a given price and has seen its lowest readings on record since May.

Despite indicating that Bitcoin is trading well below its fair value, the RSI has yet to regain the “bullish momentum” that characterized the run above $20,000 and beyond at the end of 2020.

In April 2021, Bitcoin reached $58,000 before halving in value at the end of July.

“The only way to see the July 2022 low as the cycle bottom is if you were to see the April 2021 high as the cycle top for this cycle,” Venturefounder said.

“Bitcoin and Altcoins RSI and bullish momentum peaked in April 2021 and never recovered for the remainder of this cycle. Do you think we’ve hit rock bottom?”

Another notable oversold period in the RSI came immediately after the March 2020 COVID-19 crash, an event that had a significant impact on the price strength going into the last block grant halving.

Of course, BTC/USD never looked back and went on to regain its all-time high about six months later.

BTC/USD 1 month candlestick chart (bitstamp) with RSI. Source: TradingView

The purpose of an ETF is to finally add a holding

Things may be looking up for institutional Bitcoin participation as subtle signs of recovery emerge in the statistics.

The latest such signal comes from the world’s first Bitcoin exchange-traded fund (ETF), the Purpose Bitcoin ETF.

After its holdings suddenly dropped by 50% in June, the product is finally adding BTC again, suggesting that demand is no longer declining.

The purpose added 2,600 BTC, something that commentator Jan Wuestenfeld noted resulted in several weeks of hiatus.

“Assets under management are still a long way from historical highs,” he said added.

Purpose of Bitcoin ETF Holdings Chart. Source: Glassnode

However, the recovery trend is far from universal. A look at Grayscale Bitcoin Trust (GBTC) continues a difficult trend of lack of demand.

The fund’s spot rate spread, long effectively a discount, is now hovering at a record low of nearly 35%, data from Coinglass confirms.

Grayscale continues litigation against US regulators over their refusal to allow a local Bitcoin ETF to launch on the domestic market. GBTC would convert into such an ETF if conditions permit.

GBTC Premium vs Asset Ownership vs BTC/USD Chart. Source: Coinglass

New month, new fear

It was a nice ride, but crypto market sentiment is already back in the “fear” zone.

Related: Top 5 cryptocurrencies to watch this week: BTC, BNB, UNI, FIL, THETA

The latest readings from the Crypto Fear & Greed Index confirm that the “neutral” sentiment could hardly last a day and that despite the high prices prevailing, it is difficult to shake cold feet.

The index measures 33/100 as of August 1st, still high compared to recent months but already considerably below the 42/100 seen just a few days ago.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

For the research company Santiment, however, there is still reason for optimism. The company’s own metric that manages transaction volume relative to total network capital for Bitcoin ended July in its “neutral” territory.

The Network Value to Trade (NVT) token distribution model, after printing a bullish divergence in May and June, thus broke through at the last monthly close.

“With a neutral signal now as prices have risen and token spreads have narrowed slightly, August can go either way,” Santiment summed up in a Twitter update on the latest numbers.

Bitcoin NVT model. Source: Santiment/ Twitter

The views and opinions expressed here are solely those of the authors and do not necessarily reflect the views of Cointelegraph.com. Every investment and business move involves risk, you should do your own research when making a decision.

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