Bitcoin Bulls Losing Ground after the Fake $10,000 BTC/USD Price Breakout
After weeks of not doing much, yesterday, bitcoin had yet another fake breakout of $10,000 after the Federal Reserve’s gloomy economic outlook and no chance of a V-shaped recovery.
Yesterday, Bitcoin actively participated in the Fed event with a rush of volatility along with the other markets which “is a clear sign of increased institutionalization in the space,” said analyst Mati Greenspan.
Bitcoin also has been far more volatile than stocks, gold, or the US dollar. But all of these assets reversed their initial moves, except for gold that is still holding onto its gains.
$BTC really trying to break through after that FOMC statement. Bit of a delayed reaction, but there's not really a more bullish macro catalyst than zero rates through 2022.
Would be pretty disappointed if this didn't start aggressively going higher here. pic.twitter.com/e008sqQbHF
— Ceteris Paribus (@ceterispar1bus) June 10, 2020
Last time the Fed announced the rate cut to zero in March, Bitcoin had reacted with over a 2% spike.
This time as well, BTC jumped 2.5% only to get back to the level it was trading before the spike. Currently, the digital asset is trading under $9,800 while managing a real volume of $1.8 billion.
While bitcoin’s market cap is still around $180 billion, the realized cap that measures the market capitalization of bitcoin based on coins moved, in turn, eliminating the impact of lost coins, is approaching new all-time highs at $106.2 billion.
Most Bitcoin Rallies Start in a Bearish Atmosphere
As June is progressing, the sentiments on social media have turned increasingly bearish. In the the last couple of months, bitcoin has made several attempts to jump the $10,000 line but every time it's failed to climb above this level.
This lack of price movement’s availability to stay above the $10k threshold is a psychological barrier for many traders. This is what put the overwhelmingly bullish mode during and immediately after the May halving to bearish sentiments, as per Santiment.
But do these sentiments also speak badly for bitcoin’s price in the short term? That’s not necessarily true because it has been the “extremely bullish sentiment that has often led to bitcoin correction in the past, as the hype peaks and whales look to unload on the FOMO crowd.”
Actually, several local tops occurred in the past year accompanied by strong growth in bullish sentiment. On the flip side, most bitcoin rallies in the last year started in a predominantly bearish atmosphere.
However, according to one trader, bulls are losing ground and need to recover $9,850 or we have a “giant downslide incoming.”
— TraderArjun (@arjunkkohli) June 11, 2020
The good thing is Treasury Secretary Steven Mnuchin is open to another round of fiscal stimulus. This spells bullish for not only stocks but also bitcoin because as Greenspan said,
“we can be quite assured that the printing presses aren't getting any rest tonight, nor any night for quite a while to come.”
But while bitcoin has yet to make a trek forward to $10,500, small-cap altcoins are enjoying a rally. And according to market analyst, Benjamin Blunts, with halving hype now dead and “the perfect storm” brewing altcoins can “really moon.”