The positive gains recorded in the first 10 days of July nearly disappeared on July 13 as Bitcoin (BTC) and the broader market slid towards new yearly lows.
The weak movement in the market can be traced back to a variety of factors, starting with the consumer price index on July 13 and the raging US dollar that recently reached its highest level since October 2002.
Data from Cointelegraph Markets Pro and TradingView shows that July 13 marks the fifth consecutive day of BTC price declines, which reached an intraday low of $18,910, following declines across major stock market indices.
BTC/USDT 1-day chart. Source: TradingView
As the world awaits a catalyst that can restore positive momentum to global financial markets, here’s what many analysts are saying about Bitcoin’s next move.
Was the recent rally in bitcoin the result of wash trading?
Bitcoin’s gains over the past week have sparked a new wave of optimism among some traders, but that optimism is likely to fade in the near term. Data from Arcane Research shows that the majority of the momentum came from the removal of trading fees for certain bitcoin pairs on the Binance crypto exchange.
The real daily volume of Bitcoin (average 7 days). Source: Arcane Research
According to Arcane Research, following the removal of fees, trading volumes increased on the exchange and this can likely be attributed to “trade laundering from traders seeking to exploit the removal of fees to reach higher fee levels.”
However, when looking at the cryptocurrency exchange system as a whole, activity remains subdued which indicates decreasing interest in buying cryptocurrencies at the moment.
Arcane Research said,
“All other exchanges experienced muted volume last week, with the seven-day average trading volume near one-year lows, showing that organic market trading activity is very quiet at the moment.”
More evidence highlighting the lack of interest in Bitcoin buying can be found from the Crypto Fear and Greed Index, which is currently seeing a “68-day record line” in very scary territory.
Index of Fear and Greed in Cryptography. Source: alternative
As noted by Arcane Research, the rise to 24 on July 10 was largely influenced by Binance’s decision to scrap trading fees, which “leads the scale to an overestimation of current market concerns.”
After the novelty of no-fee bitcoin trading on major exchanges subsided and volumes returned to normal, the fear and greed indicator is once again back into the extreme fear zone.
Exchange outflows provide another clue to the state of the market. After the liquidation of Three Arrows Capital and the freezing of funds on platforms like Celsius, the rate at which users withdraw BTC from exchanges reached an all-time high on June 26.
Related: 3 Key Metrics Suggesting Bitcoin and the Broader Crypto Market to Fall Further
The raised cash is more than $25,000
A final glimpse into the factors keeping Bitcoin in its current trading range was provided by researchers at Jarvis Labs, who provided the following chart showing dark liquidity bands below $18,000 and above $25,000.
Bitcoin filter map. Source: Jarvis Labs
According to Jarvis Labs, the emergence of highly leveraged liquidity indicates the possibility that BTC could reach $25,000, barring any unexpected negative developments.
Jarvis Labs said,
“The caveat here is that until the price threatens this level, no more skeletons can be revealed in the cryptocurrency market, or else more forced selling can take place.”
While the way the bitcoin price will move is still unknown, one thing that traders should prepare themselves for is the possibility of increased volatility in the coming months as rising global tensions, rising inflation and widespread pessimism suggest that the cryptocurrency market and the world In general it may be in an extended bear market.
The opinions and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risks, you should do your own research when making a decision.