Over the past few weeks, the crypto market has been holding steady while volume on exchanges have been tapering off.
Bitcoin is still trading around $9,700, down 0.62% while managing $1.3 billion ‘real’ volume.
The world’s leading digital currency is consolidating just under $10,000 which could mean that “we're in for a very powerful move if we do break that level again,” wrote Mati Greenspan in his daily newsletter Quantum Economics.
In case we fail to break the level, resistance will only get stronger the time we reach these levels. But the fact that the market is not moving from its current levels is a sign that “this is the true value of bitcoin right now,” he said.
It makes sense because, Bitcoin at $10,000 means 100 sats make a penny and as such, a psychologically important level.
“The longer we stay here, the more it will be ingrained in people's minds,” Greenspan said.
Moving forward, the potential slump could be ahead as pointed by a technical indicator. According to the DVAN Buying and Selling Pressure Indicator, which depicts bull/bear trends, Bitcoin has fallen below the trend line. Last time, it happened was in late May which suggests bitcoin may be forming a new selling pattern.
Moreover, Bitcoin’s Token Age Consumed indicator has spiked to its highest level in 40 days. This indicates that a substantial amount of coins that were previously lying dormant are once again moving addresses.
“Spikes in Token Age Consumed can signal changes in the behavior of some long-term holders, and tend to precede increased volatility for the coin's price action,” stated Santiment.
The last time we were at these levels was on April 29th which saw bitcoin gaining 8%.
Meanwhile, The Glassnode Compass remains in the green zone while bitcoin miners continue to hodl. The number of BTC sold by miners dropped by 65% after the halving which reduced miner inflow by 50%, suggesting “miners are withholding their profits until the price increases.”
So far, in 2020 Bitcoin’s price has seen an increase of 32.43% and recovered 155% since the March sell-off. These gains came while the central banks and governments around the world unleashed the stimulus measures to stimulate the economy in light of coronavirus pandemic. Bitcoin is further expected to benefit from the ‘money printer go brrr.’
“Bitcoin was conceived following the last financial crisis. It will come of age and mature as a result of this financial crisis,” said Meltem Demirors, chief strategy officer at CoinShares. “While the investment community is still mixed in its views on Bitcoin and cryptocurrencies, the trading and infrastructure ecosystem is absolutely booming, and consumer on-ramps continue to grow and evolve.”
Besides the fiscal stimulus, “people are starting to see real life use cases for BTC and that decentralization matters,” in the backdrop of pandemic and social unrest bubbling over, said Steve Ehrlich, co-founder and CEO of Voyager Digital.
“Because of this, Bitcoin is growing in popularity as a hedge against volatility in the traditional markets,” he said.