Bitcoin’s price action remains bearish this week, with potential signs of a pullback period within its broader bullish trend. Traders are closely watching external triggers, such as United States macroeconomic data releases and speeches from Federal Reserve officials, which could introduce volatility into the market. Here are five key insights on what may impact Bitcoin in the coming days.
BTC Price Dip Anticipated
Bitcoin closed the previous week above $30,000, but traders are looking for a retracement period before potential upside continuation. Technical analysts suggest that a higher low between the current price and $28,000 is desirable to maintain the uptrend. However, warnings of weakness and a potential break in the weekly structure have also been voiced.
Fed Speakers and Economic Data
This week, the Consumer Price Index (CPI) will be a crucial indicator for the Fed’s monetary policy decisions. A drop in inflation could potentially reduce the hawkish sentiment. Additionally, eight Federal Reserve officials will deliver remarks on the economy and policy, contributing to potential market volatility.
Bitcoin Network Strengthens
Despite stagnant price action, Bitcoin’s network fundamentals are poised to reach new all-time highs. The mining difficulty is expected to increase by over 5%, reflecting ongoing competition and confidence in future profitability. Hash rate estimates also suggest that it may have crossed the milestone of 400 exahash-per-second (EH/s).
BTC Supply Shock
Recent filings for Bitcoin spot price exchange-traded funds (ETFs) in the U.S. have led to increased buying activity. With diminishing supply, analysis suggests that a supply shock is inevitable, given the decreasing availability of Bitcoin for trading. The trend aligns with the “HODL Model,” which maps supply availability against future price performance.
Big Players Show Confidence
Notably, larger Bitcoin investors are actively increasing their exposure to the cryptocurrency. Entities with significant BTC holdings have accumulated over 70,000 BTC since mid-June, demonstrating continued confidence in Bitcoin’s future profitability. This trend is observed among both whales and sharks, as reflected in on-chain data.
While market conditions remain uncertain, these factors shape the current landscape for Bitcoin. Traders and investors should conduct their own research and exercise caution when making investment decisions.