Bitcoin (BTC) broke above $60,000 in the third week of July, causing an emotional reversal with new BTC bullish sentiment. Can this trend continue?
The world’s largest cryptocurrency is once again getting traders excited after the weekend’s geopolitical events, with gains now reaching 10% since July 12.
What could have been a short-lived reaction to the weekly candle close has instead formed the basis for a BTC price rally. But the key question for market participants now is where the support actually lies.
This move has been anticipated for a long time, with traders and analysts alike watching as BTC/USD plunged to a four-month low and then repeatedly failed to recover from the $60,000 mark.
Now that the process is temporarily complete, other major price levels are once again in play.
However, there is always a risk that the bulls will run out of steam at the hands of manipulative market players or that there will be a lack of consistent bid demand. This week’s Wall Street trading session will certainly determine whether that happens.
Geopolitics, along with macroeconomic factors, could provide another curveball, which starts this week. Federal Reserve Chairman Jerome Powell will provide more insight into inflation expectations on July 15, and U.S. jobs data will follow later.
Meanwhile, the price surge is changing the landscape of Bitcoin network fundamentals. After a series of difficulty drops, the network could see a 4% increase in the coming days.
Cointelegraph dives deeper into these topics and more, presenting a weekly recap of the key discussions surrounding BTC price performance.
BTC Price Rise: Is It Too Good to Be True?
If $60,000 wasn’t enough to get Bitcoin bulls going, BTC/USD is up another 3.5% after its weekly close.
According to the latest data from Cointelegraph Markets Pro and TradingView, the rally began with an impressive close of $60,800, which has now brought the price up by another $63,000.
Naturally, traders greeted this surge with considerable relief, as it solidified the $60,000 level and nearby key levels.
Popular trader Roman wrote in one of his recent updates on X (formerly Twitter) that “it looks like we’re re-entering the original range of 60-72k and there’s a divergence.”
“There are RSI levels we haven’t seen since $25,000, which I think suggests the correction is over.”
Roman referenced the Relative Strength Index (RSI) signal, which is currently “oversold” to levels last seen nearly a year ago.
But like others, he acknowledged that it can be too easy to break out and continue the uptrend.
“What concerns me is LTF volume + weekend pump,” he explained, citing the lack of after-hours trading activity and the Bitcoin bounce that occurred without the participation of “TradFi” traders.
Nonetheless, positions that were overly bearish came under pressure overnight, and investors holding short positions in cryptocurrencies were hit by liquidations.
According to data from monitoring resource CoinGlass, that totals $93.5 million as of this writing, based on a 24-hour period.
CoinGlass also showed that overhead selling liquidity is spreading around $63,500.
But zooming out, some longtime market observers see room for optimism. Checkmate, creator of analytics platform Checkonchain, noted that Bitcoin has successfully absorbed sell-side pressure from entities including the German government.
“Hey guys, Bitcoin just absorbed $50,000 worth of BTC market sell orders in a matter of weeks. It’s a very systematic and orderly correction, down about 25%,” he told his X followers that day.
“The last time this happened LUNA sold ~80k $BTC and the price dropped from $46k to $25k and then $17k shortly after. It wasn’t the same.”
Fed Powell Starts Macro Week
The macro week got off to a lively start with Federal Reserve Chairman Powell attending a discussion at the Economic Club of Washington, D.C.
Amid mixed inflation data last week, markets will be paying close attention to Powell’s words and actions for clues as to how U.S. monetary policy may evolve going forward.
The next meeting of the Federal Open Market Committee (FOMC), scheduled for later this month, is currently not expected to result in a rate cut, a key event that risk-asset traders are watching closely.
Instead, the defining moment when policy shifts to a firm “accommodative” stance is the September FOMC meeting.
“All eyes are on the Fed and the start of earnings season,” trading resource The Kobeissi Letter wrote in part of its X summary, citing upcoming earnings reports from major companies.
According to the latest data from CME Group’s FedWatch Tool, as of July 15, the probability of a September rate cut is 94.3%, compared to just 4.7% this month.
“The market currently expects the Fed to cut rates two to three times by year-end and four more times by 2025,” said Charlie Villello, chief market strategist at asset management firm Creative Planning.
Bitcoin Hashrate is about to make a full-blown comeback
The shift in price action is already being felt across the fundamentals of the Bitcoin network.
After three consecutive downtrends, mining difficulty is finally expected to start recovering on its own.
This will depend on how strong the price rally continues, but current estimates of a 4% rise on July 18 offer hope to those concerned about the health of miners.
According to raw data from monitoring resource MiningPoolStats, the hashrate is already challenging all-time highs, supporting a bullish outlook for the future.
“Bitcoin has broken $62,000, miners are finally getting out of purgatory and looking back at hell,” said Bob Burnett, founder and CEO of Bitcoin mining company Barefoot Mining.
Looking at the hash ribbon indicator, which compares 30-day and 60-day rolling hash rate changes, it suggests that the “capitulation” phase among miners may soon be coming to an end. As Cointelegraph reported, the last such phase was in August 2023, which signaled a long-term BTC price bottom below $30,000.
“If the hash rate reverses, Hash Ribbons will print one of the most historically reliable Bitcoin buy signals we’ve ever seen, and we’re getting close to that signal,” market analyst Cole Garner predicted last month.
Hedge Fund Trader: BTC Price Hits All-Time High by August
There is little involvement from traditional financial figures in BTC price predictions outside of the cryptocurrency community.
This week, hedge fund trader Josh Mann has been making waves on social media, with his bold prediction that BTC/USD will hit a new all-time high by the end of July.
In a video update uploaded to X, the Man predicted August 2023 as the start of a bullish trend line, which BTC/USD is currently attempting to reclaim once again.
“We’ve been here and down there for close to a month,” he said, adding, “We’re hopeful that things will go well with the recovery.”
However, Man is clearly bullish on where BTC price action will go next, confirming:
“We’re going to hit a new high this month. It’ll probably take about 10 days from now.”
He said that the next record for X activity will be reached before August, and that it will require a price tag of $73,800 or more.
Cryptocurrency Fear and Greed Index Doubles
The Crypto Fear & Greed Index changes daily and as a lagging indicator, it may not yet be possible to tell when “greed” will return to the market.
Related: Bitcoin Whales Buy $4.3 Billion Worth of BTC Amid Price Crash
The index, which was tagged as “extreme fear” just a few days ago, is back to 52/100.
This qualifies as “neutral,” but the full extent of the recent BTC price rally is not yet reflected in the reading.
Research firm Santiment, which conducted the market survey, predicted that geopolitical events will play a major role as performance accelerators in the future.
“Regardless of political stance (or lack thereof), watch for this type of market reaction to continue to play out on major U.S. political news through at least the rest of 2024, especially in an ever-speculative sector like crypto,” he summarized.
Santiment argued that Donald Trump has an “undeniable” bullish bias as a US presidential candidate, and that this will be evident throughout 2024.
The accompanying chart shows both the performance of BTC/USD and the Trump-specific meme coin MAGA (TRUMP).
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.