- Bitcoin sentiment has turned neutral for the first time since May 12th, at which time the Fear and Greed Index indicated “extreme fear.”
- Bitcoin pushed past the 21-day moving average, established above $40,000, which is a bullish indicator for BTC.
- Network activity has resumed as the activity of the 221 million strong cryptocurrency user base has risen by 30%.
Offbeat opinions on the future of the cryptocurrency market have widely impacted much of the crypto space. Due to a lack of confidence from retail and institutional investors, Bitcoin sank to a year low following China’s heavy pushback against crypto. Such critical news has failed to influence Bitcoin’s price directly. Speculation surrounding Amazon’s entry into cryptocurrency has kickstarted investor engagement, as Bitcoin aimed to retest the $40,000 mark, with some indicators forecasting the likelihood of another price rally if they hold.
The 21-day Moving Average Points to Bullishness
Market indicators are outlining the potential of an upward price swing for Bitcoin as market sentiment turns neutral. Data from the Fear and Greed Index highlights that the market has shifted to “greed,” 11 weeks on from the sentiment’s dip into “extreme fear.”
The positive opinion tech giants hold towards cryptocurrencies has aided in adjusting the focus towards blockchain. Additionally, the expiration of Bitcoin options served as a further catalyst for its volatility. As Luuk Strijers highlighted, before and after expiry, there is “always additional activity,” which impacts Bitcoin’s price. However, as Altcoin Psycho emphasizes, when the price continues to move in an upward trajectory, even after options expiration, traders will see it as a sign of strength.
Rekt Capital, a cryptocurrency analyst and trader, emphasized that Bitcoin could turn bullish based on the 21-week EMA, which is the middle ground between “bulls and bears.” He asserts that the bullish threshold is above the 21-week EMA line, which sits around the $40,000 mark.
On The Flipside
- Bitcoin’s slowing pace could be a result of the U.S. population reallocating their funds to leisure activities.
- Whales have continued to accumulate, despite the change in sentiment, which indicates that Bitcoin is not yet ready.
- Predicting cryptocurrency markets is like trying to find a needle in a haystack, as negative news impacts the crypto market much deeper than positive outlooks.
Crypto Users Resurgence
According to CoinMarketCap, the total crypto market capitalization has jumped to over $1.6 trillion after a 3 month low of $1.19 trillion. However, ZebPay Co-CEO Avinash Shekhar highlights that despite the current “small price fluctuations,’ which, according to him, are inexistent, Bitcoin’s technology still has a bullish outlook.
In other developments, a Crypto.com report found that the total number of cryptocurrency users in the first half of the year has doubled. The report shows that the number increased from 106 million users in January, to 221 million as of June. Adding to this, Glassnode data shows an active entities increase of 30% in the last week of June alone, when it increased from 250k to 325k active entities per day. The tweet also emphasizes the similarities between July 2020 and the present time, where a bullish similarity can be gleaned from the aforementioned data.
Balancing out the Bulls
Bitcoin tested the $40,000 resistance level and, even through a dip, it has managed to hold its momentum. Despite this, outflows continue to grasp the market and register new highs. Will Clemente underlines that exchange balances have dropped to the lows of 2018, however there has been no confirmation of this from Glassnode or exchanges themselves.
According to CryptoPotato, outflows reflect bullish indicators, as high capital investors are moving funds in preparation for new upward momentum. Adding to this, sideways price movements tend to represent a consolidation period in which investors capitalize on the low price of BTC. Regardless, retail interest will grow if Bitcoin pushes above the 100-day moving average (SMA).
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