FXOpen
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.
FXOpen offers the world's most popular cryptocurrency CFDs*, including Bitcoin and Ethereum. Floating spreads, 1:2 leverage, 30% margin call, 0.01 lot minimum transaction size with no maximum — at your service. Open your trading account now or learn more about crypto CFD trading with FXOpen.
*At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules respectively. They are not available for trading by Retail clients.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Latest from Cryptocurrencies
Latest articles
Oil Analysis: Finally, A Bearish Reversal?
The policy of OPEC+ countries to voluntarily reduce oil production was one of the drivers thanks to which the price of WTI oil increased by approximately 40% from its low in June. In such cases, it is appropriate to use
Central Bank Week Shakes Up Gold Market
Yesterday, the main event of the week took place — the Federal Reserve meeting, which had a noticeable impact on the market of assets denominated in US dollars. But besides the Fed meeting, there are a number of other events this
Will Stagflation Persist in the UK? EUR/GBP Volatility May Be an Indicator
In recent years, the United Kingdom has found itself mired in a sea of economic uncertainty, prompting widespread speculation about the dreaded 'R-word'—recession. While the nation has navigated a prolonged cost-of-living crisis marked by noticeable spikes in everyday expenses,