El Salvador “buys during the fall”
Bitcoin’s spot price action is uninspiring to traders at the start of the week. A pullback from earlier strength on Sunday worsened overnight, and the BTC / USD pair missed the $ 46,000 mark.
Amid the turmoil in traditional markets, led by the Evergrande saga in China, this week may not end up offering profitable trades. For the popular trader Pentoshi, now is the time to take stock and wait for the situation to resolve itself.
The $ 44,000 level represents a support wall that Bitcoin now looks set to retest. A deeper dive could still lead to a dip to $ 41,000 or even $ 38,000, the latter forming a key Fibonacci retracement level. Overall, however, the mood remains firmly in favor of a return to the upside in the crypto markets in the fourth quarter.
Among those who are “buying during the crash” is the government of El Salvador, which on Monday confirmed that it had bought another 150 BTC for a total of 700 BTC. President Nayib Bukele said in a series of tweets: “They will never be able to beat you if you buy during the crashes.”
Bitcoin falls but not as worrisome according to analysts
While international markets are on the downside and with concern, the price of Bitcoin is performing much better than expected, analysts say.
Whether in stocks or gold as a safe haven, the outlook is decidedly less favorable this week. Gold is heading towards its April lows, while against the Nasdaq 100 index, veteran trader Peter Brandt notes, the precious metal is almost at the lows of 20 years ago.
“Given the dollar’s rise (it’s close to the cycle high), stocks weak, metals plummet, BTC is acting like an outright champion while rejecting the notion of moving toward a deep Cycle Low. Relatively strong.” wrote trader, entrepreneur and investor Bob Lukas in a recent snapshot of the situation.
The strength of the US dollar is, in fact, clearly noticeable: The US Dollar Currency Index (DXY) is approaching 94 in a classic headwind for Bitcoin. In case the status quo starts to change, the push for BTC to perform much stronger is therefore clearly in place.
With difficulties, but with expectations of recovery
Mining difficulty, which has been mitigating the impact of China’s May mining defeat for months, is now poised to post its fifth consecutive surge on Tuesday. This is a rare occurrence: the last time the difficulty increased five times in a row, it started in late 2019, before the cross-market crash of March 2020 soured the mood. Even the subsequent bull market and race to the all-time highs of $ 64,500 failed to replicate the achievement.
As such, for those who believe that price action should follow the fundamentals of the network, the outlook seems more bullish than ever.
Bitcoin’s realized capitalization is now higher than the all-time high of the spot price in 2017, at $ 21,000. Its 200-week moving average (WMA), commonly thought of as a definitive floor price and a level that the BTC / USD pair has never violated, is now at $ 15,600. The relationship between realized capitalization – an expression of market capitalization based on the price at which each bitcoin last moved – and 200WMA is a useful indicator of the market’s growth potential.
As Cointelegraph reported, Estimates point to a six-figure BTC price by the end of the year. The fourth quarter should be the springboard; October will form a firm foundation with a minimum monthly closing of $ 63,000.
“The best bear market ever”
Bitcoin is comparatively close to its all-time highs, but no one is interested. Despite trading close to $ 50,000, the BTC / USD pair is a topic that is on the lips of fewer and fewer people this month, a trend that is also observed in Internet users.
Google Trends data shows that “Bitcoin” is just as unpopular as it was in mid-July, when the BTC / USD pair was trading above $ 30,000.
However, as analyst William Clemente suggests, these conditions are perfect for BTC’s price action to take a surprise jolt. “Bitcoin came out of a bull flag last night, set a higher high, bottomed 0.01%, and my feed is silent. Excellent,” he tweeted on Sunday, previously ironically describing the current circumstances as the “best bear market ever.” .