BCGAME - Free 5BTC Daily Bonus!Bitcoin (BTC) starts a new week with a major weekly close and everything to play for – can it hold higher?
After the weekend saw moderate volatility, including a new $30.000 support test, the BTC/USD came back above $35.000.
Despite negative press, FUD and miner turmoil in China, the latest BTC price action shows that the biggest cryptocurrency still has the energy to fight.
However, the risk of a further downturn remains, and by no means is everyone convinced that the market has really hit rock bottom.
In this article, we will discuss:
Kiyosaki: get ready for the “greatest fall in history”
It is equities, not the US dollar, leading the pack this week as the S&P 500 sees its best week since February.
As concerns about the Federal Reserve's interest rate hike eased, stocks rallied over the past week. This contrasts with the cooling of the US dollar currency index (DXY), which has halted gains in recent days after a thunderous week last week.
With the S&P 500 thus hitting a new all-time high, the risk of a change, however, cannot be ruled out, commentators argue.
“The risk of higher bond yields – and potentially a pullback in equities – on the back of strong U.S. economic data remains,” David Bassanese, chief economist at Australian fund provider BetaShares, wrote in a note cited by Bloomberg.
So far, at least, long-term bond yields remain contained and stocks more focused on the V-shaped recovery of economic growth and corporate profits.
Amidst a narrative of steady highs in stocks despite the economic hardship caused by coronavirus reactions, however, Bitcoin proponents have been predicting a day of reckoning.
Chief among them is Robert Kiyosaki, author of the popular book Rich Dad Poor Dad, who on Monday repeated his warnings about global markets.
“The best time to prepare for a crash is before the crash. The biggest crash in world history is coming,” he told Twitter followers.
The good news is that the best time to get rich is during a crisis. The bad news is that the next fall will be a long one. Get more gold, silver and Bitcoin while you can. To care.
Bitcoin seals weekly key closing …
For Bitcoin's cash price, Sunday ended up giving the bulls the happy ending they were looking for.
This specifically involves the close of the week, which as early as Saturday was in danger of materializing below key levels necessary to preserve the chances of further gains.
In the event, the BTC/USD surpassed expectations, climbing over $2.000 in overnight hours to see local highs of $35.250 on Bitstamp and a weekly close above $34.000.
That puts the pair on target and is “fantastic for bullish momentum,” analyst Rekt Capital said earlier, before the data arrived.
Rekt Capital may therefore continue to look to a more positive Wyckoff scenario involving a potential top spot in the $40.000 range.
Very nice weekly close on # Bitcoin🇧🇷 Very, very nice in fact. pic.twitter.com/8Frmn4N7TU
—Tyler (@ApeDurden) June 28, 2021
Another popular social media trader called the overnight surge “significant” and focused on the $35.000 resistance, along with Bitcoin’s rising relative strength index (RSI) to capture potential oversold (and overbought) levels.
Further gains would also go some way to correcting the so-called “death cross” that previously occurred – where the 50-day moving average crosses the 200-day moving average in a move that has received considerable press attention.
… But it will reach a record drop in difficulty
For those who applauded Bitcoin's biggest increase in difficulty since 2014, just six weeks ago, there's bad news.
As the network's fundamentals struggle after China's mining crisis, a difficulty adjustment this week will make clear the big impact recent events have had.
In four days, the difficulty will decrease by about 23,24% – something that has never happened before in the life of Bitcoin.
The record adjustment downward is a reaction to the mass sale of Chinese miners, and for some – including those moving abroad – it is a gift.
https://twitter.com/TexanHodl/status/1408870534641762310
These tweaks keep Bitcoin mining competitive while preserving network security. The lesser difficulty encourages more miners to join, making the process cheaper. This, in turn, increases competition, which means that, in general, bigger dips are followed by rises.
“Mining hashrate could decrease significantly, but the difficulty would just adjust downwards, the network would clear blocks, and the remaining miners would become much more profitable, having to sell fewer coins, driving the price up, incentivizing more mining,” Saifedean Ammous, author of “The Bitcoin Standard,” summarized in a series of tweets about current events last week.
The difficulty setting is the magic sauce that makes bitcoin work. This means bitcoin mining grows and shrinks to the size necessary to survive and keep the blocks removed.
The hash rate – the amount of computing power devoted to mining – has decreased since the China disaster, but how much depends on the estimate used.
According to MiningPoolStats, the preferred data source of Blockstream CEO Adam Back, the hash rate is currently at around 83 exahashes per second (EH/s), down from a peak of 168 EH/s.
The Global Adoption Drive Continues
An expanded view of the state of Bitcoin adoption offers welcome relief from the decidedly dubious spot market.
El Salvador has unleashed a kind of domino effect with its law to legalize Bitcoin, which goes into effect in September.
Paraguay is next in line to submit a legal motion to parliament, with details yet to be revealed in full after a legal tender bill was introduced on June 24.
Elsewhere, despite no formal change in Bitcoin's status, proponents seem encouraged by recent events.
Ricardo Salinas Pliego, Mexico's third-richest man according to the Forbes ranking, reiterated Bitcoin as the “new gold” this weekend, revealing his own contribution to local adoption.
Its banking business, Banco Azteca, is in the process of incorporating BTC, confirmed Salinas on Twitter.
“Bitcoin is a good way to diversify your investment portfolio and I think any investor should start looking into cryptocurrencies and their future,” he wrote.
At Banco Azteca we work to bring them to our customers and continue to promote freedom.
All within a climate of "extreme fear"
Even with the 5% daily gains, sentiment around Bitcoin is still strongly driven by fear.
This is in line with the classic sentiment gauge, the Crypto Fear & Greed Index, which on Monday measured just 25/100 despite price increases.
A cured indicator of how cautious traders are likely to be, Fear & Greed fell to rare lows last month, bottoming out at just 9/100.
Although its score has nearly tripled, sentiment among market participants remains one of “extreme fear” – suggesting there is plenty of potential to accommodate large price increases.
The opposite end of the spectrum, “extreme greed,” tends to precede price declines.
