‘$31K was not the end’ — 5 things to know in Bitcoin this week
Bitcoin analysts are gearing up for a break toward the $30,000 mark, but what will BTC price action offer in the coming days?
Bitcoin (BTC) starts the second week of June in familiar territory, but a breakout is coming, investors say.
After a calm weekly close, BTC/USD is firmly in its established trading range, while under the hood, market participants are preparing for some dramatic shifts.
It has been a long time coming, and for seasoned traders, the signs are increasingly pointing to volatility making a comeback.
There is little by way of macroeconomic triggers due this week, making the focus shift elsewhere for cues as to what BTC price action might do in the short term.
The on-chain analysis provides other interesting insights, reinforcing the idea that for Bitcoin currently, the only “boring” part is the spot price.
Cointelegraph looks at the key factors at play as BTC/USD hovers around $27,000 for another week.
Weekly close preserves key trend line
BTC/USD may not have inspired with its latest weekly close, but some popular traders are seeing new grounds for optimism.
Despite remaining firmly in its narrow trading range, as confirmed by Cointelegraph Markets Pro and TradingView, the chances of a breakout toward $30,000 are increasing.
“Feels like it’s a matter of time until Bitcoin finally breaks that 30k level once and for all,” trader Jelle wrote in part of his latest analysis.
Jelle, like others, noted that the 200-week moving average (MA) — a key support line — remained intact.
Also intact were various support structures on trader and analyst Rekt Capital’s radar covering daily timeframes.
“So far, so good,” he summarized, about an exit higher, potentially invalidating a bearish “head-and-shoulders” structure from the previous weeks.
#BTC successfully retesting not just the top of the red downtrending channel but also the bottom of the red box
So far, so good$BTC #Crypto #bitcoin https://t.co/a0VCL61Qvm pic.twitter.com/V7SnIMlpJZ
— Rekt Capital (@rektcapital) June 4, 2023
An additional tweet mentioned a “successful retest” of support in the offing.
“BTC broke down from a head and shoulders pattern in May. But there’s classic whipsaw action around the neckline,” trading account Game of Trades nonetheless acknowledged.
“The pattern remains valid unless the price moves above the right shoulder.”
An accompanying chart gave a potential downside target of just $24,000 for BTC/USD due to the head-and-shoulders pattern.
Others looked for less movement, such as trader Crypto Tony, who eyed $25,300 as a possible destination, subject to $28,350 staying unflipped as resistance.
$BTC / $USD – June / July plan
So right now we are consolidating following the drop from the 14th April high. I am looking for
– $25,300 target to look for longs
– Must remain below $28,350 for the downside target
– Combo corrective patternI will update daily as always pic.twitter.com/Q93mr4hjGH
— Crypto Tony (@CryptoTony__) June 4, 2023
Macro lull comes as traders eye dollar rebound
In an unusual week of calm for traders, June 5–9 will see little by way of macroeconomic data coming out of the United States.
With the debt ceiling debacle left behind, the next potential volatility catalysts will come in the form of macro reports for May, such as the Consumer Price Index (CPI) print; however, these are not due for another week.
With that, attention is focusing on oil production cuts from Opec+ members as prices continue to fall despite existing reductions in output.
Meanwhile, a more direct potential headwind for Bitcoin and crypto comes in the form of the U.S. dollar.
The strength of the greenback has been forming a rebound since the start of May, and since then, the U.S. Dollar Index (DXY) — traditionally inversely correlated with risk assets — has gained around 3.5%.
Popular analyst Matthew Hyland noted increasing relative strength index (RSI) scores for DXY on weekly timeframes.
DXY Weekly opens: pic.twitter.com/nRIGyKm4tl
— Matthew Hyland (@MatthewHyland_) June 4, 2023
Fellow trader Skew flagged 104.7%, the current June high, as a critical level to close above to form a bullish DXY trend.
“Strong close & moving higher in early EU trading session,” he commented on the day.
“If USD closes above $104.7, I would consider that as USD strength. So far this looks risk off but we see later on.”
$DXY 1D
Strong close & moving higher in early EU trading session.if USD closes above $104.7, I would consider that as USD strength.
So far this looks risk off but we see later on. https://t.co/F28baIv2JV pic.twitter.com/3SLDs5wtos
— Skew Δ (@52kskew) June 5, 2023
Over the weekend, meanwhile, TraderSZ described DXY as “bullish until proven otherwise.”
Stocks buoy bullish crypto case
The debt ceiling resolution had an immediate cathartic effect on equities, but crypto markets have broadly failed to copy their enthusiasm.
This may still change, market participants argue, as the S&P 500 hits 10-month highs.
“The US House has passed a key debt ceiling deal, launching the #SP500 to its highest price since August. Altcoins like $LTC, $LEO, and $FGC have jumped today,” research firm Santiment wrote on June 2.
“With crypto lagging behind equities, there could be some $BTC catch-up time coming soon.”
An accompanying chart also tracked a “rebound” for gold, this nonetheless short-lived, with a retracement setting in to mark the new week.
As Cointelegraph reported, others were also eyeing a positive correlation between Bitcoin and a resurgent S&P 500.
Bitcoin hodlers comfortably in profit
“It’s easy to ‘feel’ that the Bitcoin rally is over, but the facts say it’s not,” popular technical analyst CryptoCon wrote in findings last month.
At the time, BTC/USD was almost $1,000 higher than current levels, but enthusiasm was just as lacking.
CryptoCon was analyzing the state of Bitcoin holder profitability, using the net unrealized profit/loss (NUPL) metric created in 2019 by entrepreneur and analyst Tuur Demeester and others.
For the past several months, NUPL has stayed practically stationary around a value of 0.25, indicating that overall, the BTC supply is modestly “in the black.”
NUPL measures the difference between unrealized profit and unrealized loss. It is calculated by gathering unspent transaction outputs (UTXOs) and comparing how much coins are worth now with when they last moved on-chain.
“Any value above zero indicates that the network is in a state of net profit, while values below zero indicate a state of net loss. In general, the further NUPL deviates from zero, the closer the market trends towards tops and bottoms,” analytics firm Glassnode explained in an introduction.
While calm in recent months, NUPL has delivered an uptrend retest, which is cause for confidence, CryptoCon now says.
“31k was not the end, hope you’re ready!” he concluded in an update this weekend.
An accompanying chart of NUPL showed its behavior versus investor sentiment at various stages over the past 10 years.
#Bitcoin has seen a lot of sideways price action recently, but during that time two very important things have happened on the NUPL:
– Retest of trend
– Support made on Hope / Fear sectorThe next step, a leap to the belief/denial range
31k was not the end, hope you’re ready! pic.twitter.com/yi1GMO1hri
— CryptoCon (@CryptoCon_) June 4, 2023
Largest Bitcoin whales at center of “dichotomy”
On the topic of investor sentiment, the current view of the market varies heavily between classes of hodlers.
Related: Bitcoin ‘big move’ due in July after March $30K push — Latest analysis
As noted by Glassnode, most remain risk-off on Bitcoin; since May, selling has dominated despite the lack of capitulatory events.
The one exception, it appears, is the largest class of Bitcoin “whales.”
Uploading a chart of accumulation versus distribution adjusted by cohort, Glassnode showed that wallets holding at least 10,000 BTC are adding to their positions while everyone else is reducing exposure.
“An interesting dichotomy across the Bitcoin Accumulation Trend Score persists, as the largest of Whales (>10K BTC) continue to aggressively accumulate, whilst all other major cohorts experience heavy distribution,” researchers commented.
The last accumulation phase from these “mega whales” was in late 2022, with BTC/USD beginning its 2023 rebound weeks later.
The whales then paused in mid-January, entering a distribution phase of their own before flipping back to accumulation in May.
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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.
