Coin World News Report:
Continuing to fall! Bitcoin experienced a drop of up to 10,000 points last week, falling from a high of $63,861 to a low of $53,485. Although there was a rebound over the weekend, Bitcoin faced a new wave of declines this morning at 5 am, dropping from $57,000 to as low as $54,260, currently trading at around $55,500.
On July 5th, 46,000 BTC were withdrawn from exchanges.
Regarding whether Bitcoin will continue to decline or rebound soon, CryptoQuant analyst Woominkyu stated in a post this afternoon that the largest Bitcoin withdrawal since 2024 occurred on July 5th (last Friday), with over 46,000 BTC being withdrawn from exchanges on that day.
Typically, investors view this phenomenon as a bullish signal because it suggests that holders may wish to hold BTC for the long term instead of selling, therefore moving the tokens to personal wallets for safekeeping.
On the other hand, Cointelegraph also posted on the community platform X earlier today, stating that 6 key indicators indicate that the Bitcoin bulls still have the upper hand:
Bullish divergence boosts Bitcoin’s rebound prospects.
The article states that there are two main reasons for the recent Bitcoin decline: Mt.Gox repaying customers with 140,000 BTC and the German government liquidating Bitcoin, causing market panic.
However, as the price declines, the divergence between the price decrease and the rising Relative Strength Index (RSI) is gradually increasing. This type of divergence usually indicates a weakening selling pressure. In technical analysis, this situation usually suggests a potential price reversal or a slowdown in the current downtrend.
Bullish hammer pattern, oversold RSI.
There are also two classic technical indicators supporting a bullish reversal scenario. First, Bitcoin formed a bullish hammer pattern on July 5th, characterized by a long lower shadow and a short upper shadow. A similar situation occurred in May as well.
Second, the daily RSI value of Bitcoin is close to its oversold threshold of 30, which usually indicates consolidation or a period of recovery. Analyst Jacob Canfield predicts that this indicator may indicate a trend reversal, and Bitcoin is expected to rise to around $70,000.
When the RSI exceeds 70, the asset is considered overbought and may experience a pullback. When the RSI is below 30, the asset is considered oversold and may experience a rebound or recovery.
Wall Street bets on interest rate cut in September.
With the increasing probability of an interest rate hike in September, Bitcoin’s ability to recover its bull market in the coming weeks is further enhanced.
According to the latest employment data released by the US Department of Labor on the 5th, non-farm employment in April and May was revised down by a total of 111,000, indicating a continued slowdown in the hot US job market and adding confidence to the US fight against inflation.
In addition, according to CME FedWatch data, the probability of an interest rate cut in September is 70.8%, higher than the 57.9% predicted at the end of last month.
When the job market weakens, the Federal Reserve usually considers cutting interest rates to stimulate economic activity. Lower interest rates are usually favorable for Bitcoin and other risky assets because they make traditional safe investments such as US Treasury bonds less attractive.
Bitcoin ETF investors return after a decline in July.
Another bullish indicator in the Bitcoin market is the return of funds to the US spot Bitcoin ETF after two consecutive days of net outflows.
On July 5th, when the US reported weak employment data, the Bitcoin spot ETF attracted a net inflow of $143 million, indicating that Wall Street investors’ risk appetite is increasing.
More clues for Bitcoin’s rise come from the recent increase in US M2 money supply. M2 includes cash, demand deposits, and easily convertible quasi-money such as savings deposits, money market securities, and other time deposits.
As of May 2024, the M2 money supply increased by about 0.82% year-on-year, decreasing from a peak of 4.74% in October 2023 to about 3.50%.
Bitcoin miner capitulation suggests a price bottom.
The Bitcoin miner capitulation indicator is close to the level seen at the market bottom after the 2022 FTX crash, indicating that Bitcoin may have bottomed out. Miner capitulation occurs when miners reduce operations or sell some of the mined Bitcoin and reserves to sustain their livelihoods, earn profits, or hedge Bitcoin risks.
Market analysts point out that there have been multiple signs of capitulation in the past month, with Bitcoin prices falling from $68,791 to $53,550. It is worth noting that Bitcoin’s hash rate has decreased significantly, with a total computing power decrease of 7.7% to a four-month low of 576 EH/s.
The decline in hash rate indicates that some miners are reducing operations, reflecting the financial pressure on the mining community after the halving.
As weaker miners exit the market or scale back operations, more competitive miners will gain greater profits, which may stabilize their operations and reduce the demand for selling Bitcoin.