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Bitcoin resumes choppy trading in absence of directional catalysts – Crypto News
August 4, 2023 12:26 pmVideo
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Bitcoin started the month where it left off in July, trading sideways around the $29,000 mark. This has been one of the quietest periods in the crypto space, with volatility being at historical low levels as digital assets seem immune to any macroeconomic or idiosyncratic developments. So, what could really move crypto markets?
Cryptos struggle to find direction
Digital coins have exhibited remarkable stability during the summer, appearing unhindered by both bullish and bearish developments. Historically, crypto markets have overreacted to any major economic news or sector specific risks due to their relative immaturity and high-risk status, but this theme seems to be abating lately.
This summer, we have seen cryptos’ correlation with equity markets and especially the tech-heavy Nasdaq 100 break, while the intensifying regulatory crackdown has failed to apply further downside pressure in prices. To be more specific, the recent pullback in equity markets did not spill over to cryptos, which seem unaffected by the spike in US Treasury yields.
Meanwhile, on Sunday, several decentralized finance protocols got hacked, with attackers stealing around $24 million worth of crypto. This is another example of a systemic failure that would have otherwise inflicted severe damage to cryptocurrency prices, but this time around the impact was minimal.
Potential drivers
As Bitcoin and most major altcoins remain stuck in tight ranges, there are some potential catalysts that could significantly move prices. The much-anticipated approval of spot-Bitcoin ETFs could actually be a dominant factor that propels cryptos higher, whereas any negative development on the regulatory front could have the opposite effect.
Moreover, in the past few days, we saw crypto prices demonstrating resilience as US yields spiked higher. Nevertheless, in the longer term, rising Treasury yields could strengthen the US dollar whose price is inversely related to that of cryptos. To conclude, periods of prolonged calmness in the crypto sphere have been usually followed by storms, will this be the case again?
Cautiously bearish technical outlook
BTCUSD has been rangebound in the last few daily sessions following a mild pullback from its 2023 highs registered in mid-July. However, the king of cryptos has been gradually forming a structure of lower highs similar to the one observed during the April-June period, with the decline beneath the 50-day simple moving average (SMA) hinting at a deteriorating technical outlook.
Should the price reclaim its 50-day SMA, the $30,000 psychological mark could be the next obstacle for the bulls to conquer. Jumping above that zone, Bitcoin might then advance towards the April peak of $31,064.
On the flipside, bearish actions could send the price towards the recent support of $28,550, a violation of which might bring the April low of $27,000 under scrutiny.
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