(Kitco News) – Bitcoin (BTC) bulls and bears remained locked in a fierce battle for control of the price action in early trading on Thursday, with the top crypto retesting support at $66,000 following Monday’s brief rally to $70,000.
BTC/USD Chart by TradingView
“The cryptocurrency market pulled back 3% to a capitalization of $2.4 trillion, erasing gains for a while due to the Bitcoin conference,” said Alex Kuptsikevich, senior market analyst at FxPro. “For the past week and a half, the market has been predominantly moving in the $2.4-2.5 trillion range. The hesitancy of traders this week can easily be blamed on expectations of important rate decisions from key central banks and Friday's US jobs report later in the week.”
“Bitcoin spent a few seconds above $70K on Monday before undergoing a powerful sell-off that took its price below $66K at the peak of the decline in Asian trading on Tuesday,” he added. “The market was pressured by reports that the US government had put 30K Bitcoins ($2.1bn) into circulation.”
“One can only wonder whether this is part of a trend following the Mt Gox and German government sales, a game of anticipation before Trump came to power and banned these sales, or whether it's all about the ‘high price,’” Kuptsikevich said. “Only further transactions will help us to find an answer. There are believed to be over 203k bitcoins on the balance sheet, a concentrated sale of which could sell off the market.”
Amid the uptick in volatility across all markets, Kuptsikevich warned, “Technically, yesterday's breakout of resistance by Bitcoin may still be false, and the latest rise slightly changes the angle of the downtrend but does not break it.”
“It’s going to be extremely volatile this week, so I will not be surprised to see BTC price get another 10% drop/pump this week, for a few reasons,” said Alice Liu, Research Lead at CoinMarketCap.
Liu noted that the $70k level was a prime opportunity for some traders to take profits. “The market received a boost last week with anticipation of Trump’s speech at the Nashville Conference, where he was expected to mention BTC as a strategic reserve asset. This optimism peaked on the 27th, leading to a ‘sell the news' phase. In the imminent outlook, there is no new sauce of optimism in the market now,” she said.
Liu also said the, “Global market is expecting turmoil this week as three central banks (the Bank of Japan, Federal Reserve, and the Bank of England) announce their interest rate policies on Wednesday and Thursday.”
“Currently, the market generally predicts that on Wednesday, the Bank of Japan may raise interest rates against the trend, bidding farewell to ultra-loose monetary policy,” she said. “The Federal Reserve might signal a rate cut early Thursday morning, while the Bank of England is expected to cut rates for the first time in four years. These announcements could lead to the most intense 32 hours for the global market since the Covid era, likely resulting in increased volatility in crypto assets.”
Looking at the technical picture, Liu noted that “Bitcoin has reached its 100-day mark post-halving, which should set off the real bull market as per previous cycles: BTC generated 1.32x returns on Day 100, 5x on Day 200, 8.4x on Day 300 and 63x on Day 400 (2012, 2016, and 2020 cycles). Therefore, we should expect the real price actions to begin as we move past Day 100.”
“Bitcoin Open Interest has reached a historical high, with $40billion OI, signaling an imminent price breakout,” she added. “Miners have re-entered accumulation phase, MARA (Marathon Digital) recently acquiring another $100 million in Bitcoin, signaling miners’ growing confidence in Bitcoin’s long-term value. From the speeches at Nashville by Trump, JFK, and Lummis, there’s an increasingly detailed plan and schedule in acquiring BTCs as a national reserve.”
Liu said the overall picture for Bitcoin is “bearish in the short term (this week), but increasingly bullish in the longer term (Aug & H2).”
“It seems this year’s bull market only has two primary catalysts, ETFs and political developments,” she concluded. “The first one played out in H1, and we expect the second to gain momentum in H2.”
At the time of writing, Bitcoin trades at $65,890, a decrease of 3.06% on the 24-hour chart.
