Market Analysis

Bitcoin (BTC) starts the first week of July with a sigh of relief for traders as $30,000 support holds. 

BTC price action refuses to succumb to bears after 20% gains in Q2, with weekly and monthly timeframes looking strong. What’s next?

A quiet week is expected on TradFi markets, with Wall Street gearing up for the Independence Day holiday and little in store in terms of United States macroeconomic data.

Bitcoin thus needs volatility triggers from elsewhere if bulls are to have a shot at breaching resistance in place for several months.

Views among market participants are mixed on that topic — some believe that $32,000 and higher is easily achievable, while others consider this month as the peak of Bitcoin’s 2023 recovery.

Cointelegraph takes a look at some of the major factors set to influence BTC price performance in the coming days and weeks.

Short-term BTC price upside calls extend to $40,000

Bitcoin’s weekly close was convenient for bulls, offering only modest volatility, with BTC/USD continuing higher overnight.

The new week thus saw a visit to $30,850 on Bitstamp, per data from Cointelegraph Markets Pro and TradingView — the latest attempt to act closer to the $31,000 mark and the yearly highs.

Fuel for a trend change nonetheless remains absent, leading more optimistic traders to wait and see when it comes to upside continuation.

“My Bitcoin plan remains the same,” popular trader Jelle summarized to Twitter followers in part of his latest analysis.

“Market structure is bullish, we’ve reclaimed the 200-week EMA. Once we the $32k resistance area, I expect the bull market kicks off. Until then, we trade the range and buy deeper pullbacks.”

Jelle referred to the 200-week exponential moving average (EMA), which together with its counterpart simple moving average (SMA) continue to act as market support after a brief challenge in June.

An accompanying chart showed the first major upside target as the current all-time high at $69,000.

Fellow trader Crypto Ed hoped for a push toward $36,000 and even $40,000, while considering the likelihood of a retracement to $28,000 — already a popular dip-buying zone — first.

Market structure, he said, remained “good” despite last-minute volatility into the end of the month, with BTC/USD wicking to $29,500.

On-chain monitoring resource Material Indicators meanwhile noted Bitcoin whales’ role in maintaining the BTC price range.

“No question BTC whales have been distributing in the $30k range, but they’ve also been buying the dips which have helped keep BTC in this range,” part of further analysis added.

As Cointelegraph reported, July has never seen more than 10% losses for BTC price, but this is not stopping one popular trader, CryptoBullet, forecasting an end to bullish moves this month.

Predicting the area around $36,000 as the local top, CryptoBullet predicts that downside — including giving up the key moving averages — will come next.

“I’m not saying we’ll dip to 20k this or next month. Imo it will happen in Q4,” he wrote in subsequent Twitter comments on his original prediction.

Banks in focus over bond-buying losses

The macroeconomic climate looks set to be mercifully calm this week as the U.S. centers on the July 4 Independence Day holiday.

Little macroeconomic data is due, and barring curveball events, crypto should receive little volatility from sources such as changing inflation expectations.

Those expectations remain anchored in interest rate hikes returning later this month, however, when the Federal Reserve meets to decide on future policy.

As of July 3, data from CME Group’s FedWatch Tool puts the odds of a 0.25% hike at nearly 90%. The decision is due in three weeks’ time.

“Every week feels pivotal as Fed rate expectations shift rapidly. Meanwhile, stocks are pushing 52-week highs and trading has been great,” financial commentary resource The Kobeissi Letter summarized about the mood, calling the coming week “short but important.”

Elsewhere, increasing attention is being paid to the U.S. banking sector.

Regional banks continue to struggle, as evidenced by the performance of the KBW Regional Banking Index (KRX).

Even Bank of America (BoA) is on the radar for its loss-making bond purchases, a problem likewise faced by Germany’s central bank.

“These incredible headlines don’t get enough attention,” angel investor Balaji Srivinsan argued about a Financial Times piece on the Bundesbank’s predicament.

“The central bank of the fourth largest economy in the world may need a bailout because it bought bonds. This isn’t a tech crisis or even a banking crisis. It’s a bond crisis, a central bank crisis, a fiat crisis.”

Kobeissi meanwhile warned that the U.S. bank implosions which sparked the March Bitcoin bull run shared key similarities to the current situation with BoA.

Bitcoin miners challenge record exchange transfers

Bitcoin miners have underscored the significance of BTC price action passing and holding $30,000 — but perhaps not in the way bulls would like.

Data from on-chain analytics firm Glassnode reveals a huge increase in the amount of coins miners are sending to exchanges.

This even surpassed levels from April 2021, when BTC/USD hit $58,000 in the first of the year’s new all-time highs.

“Following the ascension in spot price above the psychologically key $30K level, Bitcoin Miners have continued to send large clips of BTC to exchanges,” Glassnode commented.

“Currently, Miners are sending $105M to exchanges, the second largest USD denominated transfer on record.”

Miner balances, however, maintain a slow overall uptrend in place since the start of 2023. On Jan 1, Glassnode data shows, the balance tally stood at 1,824,377 BTC, compared to 1,827,916 BTC on July 2.

Despite the sales, there is little evidence to suggest that BTC miners are experiencing difficulties. Hash rate currently remains near all-time highs, while network difficulty is just 3.26% below its own record levels seen last month.

BTC hodlers in profit refusing to sell

A more inspiring picture comes from the stalwart Bitcoin investor cohorts refusing to sell no matter the price.

Even within the context of this year’s gains, Bitcoin hodlers are staying firm in their resolve not to take profit en masse.

This is now being reflected in the amount of the BTC supply deemed “illiquid,” or out of reach in the event that strong buying pressure returns.

Glassnode’s Illiquid Supply Change metric is “extremely elevated,” currently at levels not seen at any time except during the pit of the 2022 bear market. While prices have increased, so has hodler conviction.

On paper, hodlers have every reason to take profit at $30,000. Glassnode’s Long-Term Holder Market Value to Realized Value (LTH-MVRV) metric, which charts profitability of coins held for 155 days or more, currently shows that the average LTH entity is 47% in profit on their position.

Sentiment reflects investor indecisiveness

Lastly, the jittery nature of the average crypto market participant remains firmly on display in sentiment data.

Related: Bitcoin speculators send 35K BTC to exchanges in new ‘elation inflow’

The Crypto Fear & Greed Index continues to highlight just how malleable sentiment is depending on how Bitcoin treats the $30,000 mark.

It is not only BTC/USD which is facing a key resistance/support flipping task — Ether (ETH), too, has its work cut out to reclaim $2,000.

As such, Fear & Greed continues to bounce around between the mid-50s — “neutral” — and mid-60s, or “greed.”

Current 2023 highs for the Index are at 69/100, with levels at Bitcoin’s 2021 all-time highs of $69,000 only around 10% higher.

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

This article was originally published by Cointelegraph.com. Read the original article here.