The market has entered a consolidation zone after the anomalous activity of May 19, with fluctuations framed by a narrowing triangle formation. Currently, no significant news reports are affecting the market, and the volumes are fading. This situation is reminiscent of the calm before the storm. What will the storm be like and when will it happen?
Optimists are looking for arguments that would signify a resuming growth. Analysts point to the outflow of bitcoins from cryptocurrency exchanges (see fig. 2), as evidenced by data (see fig. 1) collected by the Glassnode agency. Blue arrows on the chart indicate that previous outflows occurred against the backdrop of rising quotes. Therefore, the current outflow, according to analysts, could be a bullish harbinger.
But digging deeper, we will find out that this was not always the case. A similar outflow occurred during the lull in the first half of November 2018. And in the second half, a bearish storm occurred, and BTCUSD collapsed from 6400 to 3200.
Volume analysis does give cause for concern. On July 11, there was a growth attempt (see fig. 3), but the volumes were low, which indicates a possible shortage of buyers. The next day, July 12, confirms the weakness of demand, as the price decreased on growing volumes, which can be interpreted as active selling pressure. It seems that negative sentiment prevails in the market, as participants are actively selling the coin instead of buying. If so, then the price of 33,500 is too high for BTC.
In such conditions, the fate of a psychological support level of 30k causes more and more concerns.
This outlook represents FXOpen Markets Limited opinion only, it should not be construed as an offer, invitation or recommendation in respect to FXOpen Markets Limited products and services or as financial advice. Cryptocurrency CFDs are not available to trade in all jurisdictions.
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