Bitcoin Consolidates Above $60,000 Support Amidst Selling Pressure
Bitcoin (BTC) has struggled to regain bullish momentum recently, staying in a consolidation phase just above the critical $60,000 support level. Despite hitting an all-time high three months ago, the largest cryptocurrency saw a drop to as low as $59,500 on Wednesday due to increased selling pressure from miners.
Selling Pressure from Miners
The ongoing miner capitulation, the longest observed since the summer of 2022 before the FTX implosion, indicates the impact of the Bitcoin Halving supply-squeeze effect.
- Crypto analyst Ali Martinez pointed out that Bitcoin miners have sold more than 2,300 BTC in the past 3 days, totaling approximately $145 million.
This selling pressure from miners adds to recent BTC sales by the US and German governments, contributing to downward pressure in the market and keeping prices within the lower range of the wider consolidation zone between $60,000 and $70,000 experienced in recent months.
- Addresses tied to the German and US governments have sent $737 million worth of BTC to exchanges like Coinbase, Bitstamp, and Kraken through various transactions.
As selling pressure from governments and miners eases over time, market observers anticipate a potential price recovery for BTC, following the typical pattern seen during the post-Halving period, where new all-time highs are often reached.
Bitcoin Price Analysis
Market expert Scott Melker notes that the market may be approaching a crucial signal, suggesting that if a daily candle closes below the $60,300 level, it could lead to a bullish divergence.
- The move would involve the daily RSI (Relative Strength Index) moving out of oversold territory, similar to last August when the price was around $26,000.
Melker stresses the importance of a close below the mentioned level, followed by a clear upward movement in the RSI without making a lower low. A significant downward move would be necessary for the RSI to drop lower than its level on June 24th.
However, crypto analyst Andrew Kang emphasizes the potential impact of a possible loss of the four-month range on Bitcoin, comparing it to the range observed in May 2021 following a parabolic rally of BTC and altcoins.
- Kang highlights that over $50 billion in crypto leverage is currently near all-time highs, compounded by the extended consolidation phase of 18 weeks without experiencing extreme washouts as seen during the 2020-2021 bull market.
Additionally, Kang suggests that initial estimates in the low $50,000s may have been conservative, and a more substantial reset to the $40,000s could be feasible. Such a pullback would significantly impact the market, possibly requiring a few months of choppy or downward price action before a reversal and an upward trend emerge.
At the time of writing, BTC has bounced back above the $60,350 level after briefly dipping below this crucial support for potential upside movements.
- The leading cryptocurrency has erased all gains in wider time frames, currently showing a 12% price decrease in the monthly time frame.
Hot Take: Bitcoin Faces Pressure Amidst Miner Sales and Government Transfers
Bitcoin is currently facing selling pressure from both miners and governments, with recent actions contributing to the cryptocurrency’s struggle to regain bullish momentum. As market observers anticipate a potential price recovery for BTC post-Halving, the ongoing dynamism between sellers and buyers will likely determine the direction of the market in the coming weeks. Traders and investors are advised to closely monitor key levels and signals to navigate the current market conditions effectively.
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