Coinbase Analysts Warn: Bitcoin’s Upward Trend Could Hit a Wall — Here’s Why
July 19 2024 - 6:00PM
NEWSBTC
As Bitcoin is experiencing an uptrend in price increasing by 12.6%
in the past week to trade above $66,000, analysts at Coinbase in a
Friday report have disclosed potential limitations to its upward
trajectory due to “increasing sell orders” on the exchange.
According to the report, the recent appreciation in Bitcoin’s value
has tempted many traders to capitalize by selling, which could curb
further gains. Related Reading: Market Strategist Says Bitcoin
Downtrend Is Finally Over, Here’s Where Price Is Headed Next A Wall
Ahead, What Happens To Bitcoin Then? This report, which analyzes
the market’s overall picture, was compiled by Coinbase researchers
David Duong and David Han. They noted that sell orders have been
rising on Coinbase within 5% to 10% of the mid-price, indicating a
strong desire not to see higher prices for the digital currency.
This suggests there might be a cooling-off from recent highs as
traders take profits and reposition in response to current market
conditions. According to Duong and Han: We may be seeing some
profit taking at current levels and/or a greater willingness by
market participants to sell into price appreciation, which may
limit price moves to the upside Such activities are essential
market sentiment indicators that could influence Bitcoin’s
short-term value. In their analysis, Duong and Han also reference
data from Arkham Intelligence, which highlights some external
factors that are also at play contributing to the sell-side
pressure. One significant factor is the ongoing Mt. Gox repayments,
which have seen nearly 50,000 Bitcoin moved to exchanges since July
5. Despite this, the Mt. Gox trustee still holds a considerable
amount of BTC, adding a layer of uncertainty and potential
sell-side pressure to the market. However, some positive factors
might help to offset the increased selling demand. One of the most
relevant factors is the US political situation. In July, the U.S.
political dynamics shifted dramatically resulting in a significant
depreciation of the US dollar; the DXY index (which measures the
dollar against a basket of other major currencies) falling by more
than 2%, according to the report. Since the value of Bitcoin is
primarily valued in US dollars, a weaker dollar means a higher
relative value of Bitcoin which may provide a buffer against some
of the downward pressures from increased sell orders. Further
Roadblock On The Horizon Besides the Coinbase report that has
already signaled an impending correction for Bitcoin, legendary
crypto trader, Perter Brandt has also recently shared a notable
concern for the top crypto. Brandt discloses that while he is
“impressed” by Bitcoin’s upward trajectory so far, “the sequence of
lower highs and lower lows continues despite the halving, despite
the [exchange-traded fund] ETf, despite the hype.” This statement
suggests a troubling trend for Bitcoin, indicating that instead of
the asset having broken out of its current range, it has only
continued to move in lower highs and lows. Related Reading: Mass
Exodus? Over 672,000 Bitcoin Holders Drop Out Amid Market Shifts
Bitcoin trades for $66,447, a 3.9% rise from its previous lows of
$63,229 in the past 24 hours. Featured image created with DALL-E,
Chart from TradingView
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