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Thursday was a pivotal day for crypto markets. Bitcoin (BTC) could not overcome a key resistance level despite a favorable US inflation report. The US reported its first drop in consumer prices in four years, which led markets to anticipate a Fed rate cut. This initially boosted higher-risk assets, including BTC.

Bitcoin’s Failed Breakthrough

For a moment, it seemed like Bitcoin bulls would push the price above the descending trendline that has characterized the sell-off since early June. This would have signaled an end to the pullback, attracting momentum traders. However, hopes were dashed as Bitcoin’s price fell below $57,000 early today, reversing the bullish momentum.

Implications of the Latest Bull Failure

The failure to break the trendline resistance, despite positive macroeconomic news, suggests potential further price weakness. A similar trendline rejection on July 1 deepened the sell-off, indicating that the market may face continued challenges.

Potential Bullish Indicators

Despite recent setbacks, there is hope for Bitcoin bulls. The daily chart MACD histogram, an indicator of trend strength and changes, is hinting at a crossover above zero, which could signal a bullish shift in momentum. Additionally, the supply overhang from Germany’s Saxony state, which contributed to the price drop earlier this month, is nearly exhausted.

Market Influences and Future Outlook

Uncertainty remains about how much of the 95,000 BTC, part of the total 140,000 BTC set for distribution to Mt. Gox’s creditors, will be liquidated. Crypto prime broker FalconX noted that some of the $16.3 billion FTX repayment could translate into buying pressure. Additionally, the increasingly positive stance towards crypto and a potential interest rate cut in September might benefit risk assets, including Bitcoin.

FalconX also mentioned that potential selling by Mt. Gox’s creditors might differ from Saxony’s sales. They suggested that more flow might go to exchanges rather than professional liquidity providers, or that a more diversified holder base could spread out sales over time.

Conclusion

The Bitcoin price struggles to surpass key resistance levels despite positive economic news, indicating possible continued volatility. However, several indicators and market dynamics suggest potential bullish shifts in the near future.

Despite recent price corrections, crypto investors maintain a bullish outlook, according to a CoinGecko survey.

Bitcoin’s Key Price Levels

Bitcoin (BTC) is currently holding the $58,000 price level, which is crucial for breaking its recent choppy phase, according to trader Altcoin Sherpa. This level aligns with Bitcoin’s 200-day exponential moving average (EMA 200). To pursue $63,000, Bitcoin must close above this level on higher timeframes.

“If BTC can’t break it, we might see it test the low 50ks. We’re in a wait-and-see mode now,” added Altcoin Sherpa.

Recent Price Movements

Bitcoin attempted to rise today, as reported by trader Rekt Capital. He noted on X that BTC tried to break a one-and-a-half-month downtrend by surpassing the $59,000 price level. However, after slightly overtaking the downtrend line, Bitcoin was pushed back to the low $58,000 level.

Rekt Capital emphasized the importance of Bitcoin closing the week above $60,600. Failing to do so risks further declines, preventing a return to the accumulation range.

“Bitcoin is rallying now. It needs to reclaim the $60,600 range low as support to return to the re-accumulation range it broke down from last week,” Rekt Capital said.

Investor Sentiment Remains Positive

Despite these price fluctuations, the majority of crypto investors remain optimistic. According to a CoinGecko survey, over 50% of investors and builders are still bullish on the current bull cycle. This is notable even as traders and spectators exhibit the most bearish sentiment since the halving.

Final Thoughts

The crypto market is experiencing volatility, but investor sentiment remains largely positive. Bitcoin’s performance at key price levels will be crucial in determining its next moves.

Bitcoin (BTC) finds itself at a pivotal point in this market cycle. While several factors hint at continued downside, others suggest a potential bottoming out of prices. Currently,

BTC trades at $57,700, having bounced back from last week’s low of $53,600. Despite this recovery, it remains in a technical downtrend from March’s record high of $73,800, with lower highs at $71,300 and $63,900.

Bearish Signals on the Horizon

Data from CryptoQuant indicates that a significant correction or the start of a sustained bear market could be imminent. The profit and loss index hovers around its 365-day moving average, a level that has previously preceded sharp declines in May and November 2021. Additionally, CryptoQuant’s bitcoin bull-bear market cycle indicator is nearing a critical level, hinting at a potential descent into a bear market.

Stablecoin Market Cap Stagnation

The stagnant market cap of tether (USDT) also suggests that a rally may be difficult to achieve. Historically, market recoveries have been linked to an increase in stablecoin liquidity. However, this growth has been lacking recently, adding to the bearish sentiment.

Bitcoin Whales Increase Holdings

Despite these bearish indicators, bitcoin whales have been actively increasing their holdings. Large BTC holders have boosted their stash by 6.3% over the past month, marking the fastest accumulation rate since April 2023. This activity suggests confidence among major investors even during the recent downswing.

Germany’s BTC Selling Nears End

Germany’s aggressive selling of seized BTC, primarily from the Movie2k case, appears to be winding down. The government has nearly emptied its wallet after seizing 50,000 BTC in January, which may reduce selling pressure in the market.

Bullish Factors to Watch

Several bullish factors could counterbalance the bearish signals. The potential approval of an ether ETF in the U.S. and the continued growth of U.S. stock indices, which have historically correlated with bitcoin, suggest that 2024 may see continued upside. Despite signs of short-term exhaustion, these factors provide a hopeful outlook for the coming year.

Bitcoin (BTC) remains steady at around $58,500 despite the ongoing divestment by German authorities. The leading cryptocurrency by market value struggled to maintain gains above $59,000, trading at $58,470 at press time, down 1.6% from a high of $59,450 earlier.

German State of Saxony’s BTC Movement

According to Arkham Intelligence, the German Federal Criminal Police Office (BKA) moved 5103.5 BTC, worth nearly $300 million, to exchanges Kraken and Coinbase, as well as market makers like Cumberland and Flow Traders. This action is part of their strategy to liquidate BTC seized from a privacy website.

The German Government just sent another 3000 BTC ($176.26M) to Flow Traders.

Ongoing Liquidation Impact

The German state of Saxony has been actively moving bitcoin for the past few weeks. Since starting in late June, Saxony has sold 30,997 BTC, significantly impacting the crypto market. BTC prices have dropped over 15% in the past four weeks, hitting a low of $53,550 last week. Currently, the BKA-linked wallet holds 18,860 BTC.

Market Adaptation and Investor Sentiment

The market is slowly adapting to the ongoing BTC divestment. Analysts like Valentin Fournier from BRN note that the market is growing more comfortable with these outflows. The renewed inflows into Bitcoin ETFs indicate a potential trend reversal, supported by technical indicators like the RSI.

Economic Indicators and Future Outlook

Despite the recent market turbulence, the broader outlook for Bitcoin remains positive. Major economies are in an expansionary phase, and traditional markets are showing peak optimism for technology stocks. While positive news is expected from the upcoming U.S. CPI report, caution is advised as potential hawkish comments could cause market instability.

Wallets linked to the German government still hold approximately 23,800 bitcoin, according to Arkham Intelligence data.

Government Moves $500M in Bitcoin

Bitcoin (BTC) dropped on Monday afternoon in Europe as the German government moved $500 million in assets, as shown by blockchain data. According to Arkham Intelligence, a Bitcoin address linked to the German government transferred 8,700 BTC to an intermediate wallet. These assets were then sent to crypto exchanges Bitstamp, Kraken, Coinbase, and market maker Flow Traders.

Bitcoin Price Fluctuations

Following these transactions, Bitcoin’s price fell by 3%, reaching a low of $55,000. It later rebounded to slightly above $56,000, marking a 1.2% decline over the past 24 hours.

Market Conditions and Reactions

This price action followed a significant drop last week, reaching the lowest price since February. Market analysts attributed this to an influx of supply during the typically quiet and low-volume summer period. Both the German and U.S. governments appear to be selling seized assets, coinciding with the defunct crypto exchange Mt. Gox issuing repayments.

With the latest asset transfers, the German government’s Bitcoin holdings have decreased to 23,800 BTC, valued at $1.3 billion, according to Arkham data.

By moving a large volume of Bitcoin, the German government’s actions have notable implications for the crypto market. Keeping an eye on such movements can help investors and enthusiasts better understand market dynamics and price fluctuations.