Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesCopyBotsEarn

DailyCoin Bitcoin Regular: BTC to Face $62K Test Amid ‘Bear Trap’ Signs

DailycoinDailycoin2024/08/10 01:27
By:Dailycoin

Bitcoin remains a beacon of both opportunity and uncertainty. As digital gold seeks to find footing amid a tumultuous market, the cryptosphere buzzes with speculation and intrigue. Recent developments have set the stage for a dramatic shift, with pivotal events that could shape Bitcoin’s trajectory in the coming weeks.

Sponsored

This Bi-Weekly DailyCoin Bitcoin Regular, compiled by our expert Kyle Calvert , dives into recent developments and the ongoing tug-of-war in the Bitcoin market. We unpack the price action, countered by long-term holder selling. We’ll also explore analyst predictions, ranging from potential support levels to a bullish breakout.

Table of Contents

  • News and Events
    • Ripple and SEC Lawsuit Ends
    • Senator Lummis Introduces Bill for U.S. Bitcoin Reserve
    • Bitcoin Regains $60,000 Foothold
  • Experts Forecast
  • Current Outlook
    • On the Flipside
    • Why This Matters

News and Events

Ripple and SEC Lawsuit Ends

While not specifically Bitcoin related, the recent Ripple-SEC ruling on XRP has provided crucial clarity on what constitutes a security. This decision, though not directly related to Bitcoin, immediately impacted the market. Just one day after the ruling, Bitcoin experienced a 12% surge.

Senator Lummis Introduces Bill for U.S. Bitcoin Reserve

Senator Cynthia Lummis has proposed a bill to establish a “Strategic Bitcoin Reserve,” aiming to buy one million Bitcoins over five years. Now under review by the Senate Committee on Banking, Housing, and Urban Affairs, the bill has garnered strong bipartisan support and could impact U.S. financial policy on cryptocurrencies.

Bitcoin Regains $60,000 Foothold

Bitcoin has recovered to over $60,000 after a significant drop of 25% in the past two weeks, falling from $65,000 to a low of $49,000. The initial decline was driven by global market panic related to the Japanese Market. However, the cryptocurrency has bounced back, buoyed by promising economic data from the United States.

Experts Forecast

In the latest analysis on Bitcoin’s trajectory, experts suggest Bitcoin could overcome its imminent “death cross” if it turns the $62,000 level into support. In an August 9 X thread, trader Benjamin Cowen used historical data to show how bulls might avoid a significant price drop.

On Monday on my YouTube channel I mentioned that we would likely see a #BTC rally into its death cross.

You can see that rally has now arrived.

So perhaps some context is needed –

What happened during prior death crosses?

Thread 👇 pic.twitter.com/pDbfYTseYs

— Benjamin Cowen (@intocryptoverse) August 8, 2024

Despite recent price increases, there has been no rebound in futures market open interest following a historic Bitcoin flush. Julio Moreno, an analyst at CryptoQuant, noted, “This Bitcoin bounce has been mostly shorts covering positions in the futures market.”

This #Bitcoin bounce has been mostly shorts covering positions in the futures market.

Open interest down, prices up. pic.twitter.com/sxQNsbTXli

— Julio Moreno (@jjcmoreno) August 9, 2024

CryptoQuant contributor Axel Adler Jr. flagged $62,000 as a crucial resistance level, with major support at this week’s six-month lows below $50,000.

The key resistance levels are in the $62-64K range.

Support remains at the $49K level. pic.twitter.com/u2jKPawWcV

— Axel 💎🙌 Adler Jr (@AxelAdlerJr) August 9, 2024

Pseudonymous trader Byzantine General described the recent market as a potential bear trap, stating, “What an insane weekly. Probably the most epic bear trap I’ve ever seen.” A bear trap occurs when traders drive down the price to trap short-sellers.

What an insane weekly.

Probably the most epic bear trap I've ever seen. $BTC pic.twitter.com/W8SLyRm4pB

— Byzantine General (@ByzGeneral) August 8, 2024

The sentiment among futures traders has shifted, with CoinGlass data showing 52.48% in long positions versus 47.52% in short positions.

Current Outlook

On August 8, Bitcoin surged by over $5,100, achieving a 24-hour gain of 8.3% and reaching an intraday high of $59,889 before settling at $60,698. This rally follows positive data from the U.S. labor market, which may have boosted investor confidence.

The Department of Labor reported that initial jobless claims dropped to 233,000 from July 28 to August 3, down from 250,000 the previous week. This figure was lower than the 240,000 claims economists had expected, suggesting the economy may not be heading into a recession as feared.

This optimistic outlook has influenced market expectations, with the CME FedWatch tool showing a 100% probability of a 25 to 50 basis point rate cut in September.

Target rate probabilities for the September Fed meeting. Source: CME Group

Bitcoin’s price increase also reflects significant shifts in the futures market, marked by over $114.40 million in short liquidations versus $96.96 million in long liquidations in the past 24 hours. Additionally, short Bitcoin positions totaling over $46.24 million were liquidated compared to $26.49 million in long liquidations.

The rise in Bitcoin futures’ open interest and funding rates coincides with these liquidations. Coinglass data reveals an increase in open futures contracts to $27.01 billion from $26.65 billion, with the funding rate rising from -0.0441% per week to 0.107%.

Bitcoin whales have capitalized on recent price dips below $60,000 and $50,000 by increasing their holdings. On-chain data shows large investors have been actively buying, indicating bullish sentiment.

10 – 1,000 BTC holdings chart. Source: Santiment

Moreover, BTC balances on exchanges have dropped to a five-year low of 2.68 million BTC, down 10.9% over the past 90 days. This decline suggests investors are moving their Bitcoin to self-custody wallets, anticipating future price increases.

BTC reserve on exchanges. Source: CryptoQuant

These developments highlight a complex interplay of factors shaping Bitcoin’s recent performance and future outlook.

On the Flipside

  • While the recent price increase is significant, some analysts warn it may be due to short sellers being squeezed, not a fundamental shift in the market.
  • A “death cross” technical indicator is still threatening, potentially leading to a price drop if Bitcoin can’t hold above $62,000.

Why This Matters

Bitcoin’s recent fluctuations highlight its volatility and resilience, driven by legislative proposals, technical signals, and investor behavior. Its rebound to $60,000, alongside new regulations and shifts in trading strategies, shows growing institutional interest and long-term confidence. The drop in Bitcoin on exchanges and increased whale investments signal potential future price trends.

Bitcoin’s back above $60K. The crypto market is rebounding. Want to know more? Read here:
Bitcoin Reclaims $60K Amid Wider Crypto Market Recovery

Bitcoin and Ethereum ETFs are struggling. Investor confidence is shaken. Find out why in this article:
Bitcoin & ETH ETFs Trade Fortunes as Confidence Shaken

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Stake to earn
CEC, QTLX, GDV and other popular new coins are in hot progress!
Stake now!