Bitcoin (BTC) is entering another week in a precarious position near $20,000 ahead of new macro turmoil.
After having admittedly its best weekly gains since March, the largest cryptocurrency is struggling to maintain its recently recovered levels.
Major resistance zones remain overhead, and with inflation data to be released later in the week, the coming days could be unnerving for risky assets everywhere.
At the same time, crypto market sentiment is showing signs of recovery, and on-chain stats continue to underline what should be Bitcoin’s last macro price floor.
With conflicting data everywhere, Cointelegraph takes a closer look at potential market-changing factors for the week ahead.
200-week moving average causes headaches
At around $20,850, the June 10 weekly close was hardly anything special for BTC/USD, but the pair still achieved its best seven-day growth in several months.
Sunday finished a full $1,600 higher than its position at the start of the week, sealing Bitcoin progress not seen since March.
The success didn’t last, however, as hours turned negative after the weekly close. At the time of writing, BTC/USD was targeting $20,400, according to data from Cointelegraph Markets Pro and TradingView.
Bitcoin’s ability to hold its current levels could be key in setting the mood this summer, as relief on global stocks could offer crypto an opportunity to offset some of its losses over the past few months. to clear.
So commentators, including trading suite Decentrader, watched the weekly chart with interest.
Weekly look at $BTC future. The current candle will close on a bullish engulfing bar above the Moonraker and weekly vwap. The momentum is also rising. If the stocks continue to rise and have a summer rally $BTC and crypto should probably follow suit. https://t.co/tlkrnTsG33
— Decentrader (@decentrader) July 10, 2022
Others were less enthusiastic, noting that BTC/USD was still close below the key 200-week moving average (WMA) at around $22,500.
In past bear markets, the 200 WMA has acted as a general support level, with Bitcoin briefly going below to hit macro bottoms. This time, however, it seems to be different as $22,500 has been absent from the chart for a month.
#BTC weekly candle is up +15% but still holding resistance below 200MA for 3 weeks.
Lower timeframes are a bit more optimistic, indicators are cooling, but markets remain anxious.
— Steve Courtney ~ Crypto Crew University (@CryptoCrewU) July 8, 2022
Meanwhile, zooming out, popular trader TechDev argued for a more optimistic outlook for the remainder of 2022.
By the end of the year, he argued over the weekend, a chargeback from other major WMAs should see Bitcoin end its “re-accumulation phase” altogether.
“BTC Flipping 32-35K Likely Confirms Re-accumulation End & This Year + Correction,” TechDev told Twitter followers
“It is very likely that this will happen once both 100W and 50W EMAs are in this range. 100W currently at 34.8K and 50W at 37.2K.”
Elsewhere, the ongoing liquidation of assets from controversial crypto lending platform Celsius added to the selling pressure.
Celsius continues to send its remaining crypto assets to exchanges. A few hours ago, 2,000 wBTC was transferred from the main wallet and after a series of hops it finally reached Coinbase and Binance.
Remaining main assets:
410k STETH ($479mm)
16k wBTC ($342mm) pic.twitter.com/ae6viYL1Jk
— light (@lightcrypto) July 10, 2022
Relentless dollar is back as Asian markets fall
Asian stocks trended downward on July 11 as the start of macro week was clouded by news of social unrest in China.
When protesters demanded the release of frozen funds amid a scandal involving both bank officials and local authorities accused of misusing COVID-19 tracking apps, markets felt the pressure.
At the time of writing, the Shanghai Composite Index was down 1.5%, while the Hang Seng in Hong Kong was down 3.1%.
Europe did slightly better with modest growth for the FTSE 100 and German DAX, while the United States had yet to open.
Before Wall Street bounced back, however, the US dollar index (DXY) already made new moves higher, nullifying a retracement that had brought a cooler end to last week.
DXY stood at 107.4 on July 11, just 0.4 points lower than the highs of 20 years ago.
An analyst at trading firm The Rock analyzed the situation and described DXY as “about as extreme as it gets” in terms of growth so far.
“Based on the extreme rally so far this year, the DXY is now up 16% year-over-year,” he said. wrote†
“This is about as extreme as it gets historically and unfortunately it usually coincides with major financial stress in markets, a recession or both.”
Bitcoin managed to break its traditional inverse correlation with DXY last week and rose along with the index.
Inflation tipped for ‘messy week’
As if that weren’t enough, the age-old topic of inflation will provide another test of market resilience this week.
The June consumer price index (CPI) readout is scheduled for July 13, and the monthly figure is expected to be even higher on an annual basis.
The higher inflation and the more it deviates from already high expectations, the more risky assets tend to react in anticipation of a response from policymakers.
So for macro analyst Alex Krueger, the likely trajectory for this week is clear.
“It’s getting messy,” he summed up on Twitter.
Themes this week
#1 CPI inflation. The consensus is higher: 8.8% yoy, 1.1% mother. My take: comes in even higher, big dip is bought.
#2 Income. This week mainly financial matters. Should be ok.
#3 European gas crisis. Puts downward pressure on risk and the euro.
Gonna get messy. https://t.co/LCmt2GRcHl
— Alex Kruger (@krugermacro) July 10, 2022
CPI took away many of the leading inflation indicators, but even caught the attention of mainstream commentators this weekend with a stark hint that this week’s numbers could put the cat in the cage.
“As US CPI inflation could hit very close to 9% next week, some are quick to point out that this measure is looking backwards,” economist Mohamed El-Erian responded†
“Yes…but it captures the pain that many feel, especially the less fortunate segments of society; and affects inflation expectations.”
Any knee-jerk reaction, meanwhile, could definitively shock Bitcoin markets in line with other risky assets, or at the very least cause major volatility, as seen during past CPI events.
MACD hint on price bottom in full swing
With multiple Bitcoin price metrics either blinking “bottom” or even hitting all-time lows, there is no shortage of signals suggesting that a BTC investment at current prices has a historically unrivaled risk-reward ratio.
This week, the most recent stat to join the herd is the moving average convergence/divergence (MACD) on the weekly chart.
MACD effectively follows a chart trend that is already happening. It involves subtracting the 26-period exponential moving average (EMA) from the 12-period EMA.
When the resulting value is below zero, Bitcoin tends to be in a bottoming scenario, meaning the recent trip to $17,600 could be too if historical standards repeat.
— dave the wave (@davthewave) July 10, 2022
Commentator Matthew Hyland, meanwhile, noted a similar MACD structure still plays on the 3-day chart.
“3-Day MACD is still on a bullish cross,” market analyst Kevin Svenson added†
“Despite the downturn, I remain optimistic here in the medium term.”
As Cointelegraph recently reported, Bitcoin’s relative strength index (RSI) is already at its most “oversold” level in history.
Last week in the meantime one trader Cited July 15 as the key date another chart function will call the bottom, it consists of two separate MAs.
2 Month Highlights for Crypto Fear & Greed Index
Like a humble silver lining, the average crypto investor is slowly regaining confidence, the latest data suggests.
Related: Top 5 Cryptocurrencies to Watch This Week: BTC, UNI, ICP, AAVE, QNT
Building on previous strength, crypto market sentiment reached its highest level since early May over the weekend and is now at 22/100.
While the Crypto Fear & Greed Index is still in “extreme fear” territory, it stands in stark contrast to the events of the past two months, where it plunged as low as 8/100 – even below some previous bear market bottoms.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move carries risks, you should do your own research when making a decision.