The positive gains recorded in the first ten days of July have practically disappeared as of July 13, as bitcoin (BTC) and the broader market fell back to new yearly lows.
The subdued action in the market is due to a variety of factors ranging from the Consumer Price Index print, which hit a record high, to the US dollar, which recently hit its highest level since October 2002.
Data from Cointelegraph Markets Pro and TradingView shows that July 13 marked the fifth consecutive day of decline for BTC price, which hit an intraday low of $18,910, following declines in major stock indices.
As the world waits for a catalyst that could bring positive momentum back to global financial markets, Here’s What Various Analysts Have To Say About What’s Next For Bitcoin.
Was the latest bitcoin rally the result of a laundering operation?
Bitcoin’s gains over the past week had sparked a new wave of optimism for some traders, but that optimism is likely to fade in the near term.. Arcane Research data shows that most of the boost came from the removal of trading fees for certain bitcoin pairs on cryptocurrency exchange Binance.
According to Arcane Research, after the removal of the commission, trading volumes on the exchange soared and this is most likely attributed to “wash trading by traders looking to take advantage of the fee removal to hit higher commission levels”.
Nevertheless, looking at the crypto exchange ecosystem as a whole, activity remains subdued, indicating less interest in buying crypto at the moment.
ArcaneResearch said:
“All other exchanges saw muted trading volume last week. Average seven-day trading volume was near 1-year lows, illustrating that organic trading activity in the market is very subdued right now.”
Extreme fear persists
Other evidence that highlights the lack of interest in buying bitcoin can be found at the Cryptocurrency Fear and Greed Index, which is currently experiencing a “record 68-day streak” in extreme fear territory.
As Arcane Research points out, the rally to a score of 24 on July 10 was largely influenced by Binance’s decision to remove trading fees, which “led the metric to exaggerate current market sentiment fears”.
After the news that you could trade bitcoin commission-free on the major exchange died down and volumes returned to normal, the Fear and Greed index has dropped back to the extreme fear zone.
The exits are further proof of the state of the market. Following the liquidation of Three Arrows Capital and the freezing of funds on platforms like Celsius, the rate at which users have been taking BTC out of exchanges reached its highest level in history on June 26..
Since the start of 2020, BTC outflows from exchanges have far outpaced BTC inflows, with a sharp increase between June & July 2022.
On June 26th, we saw the largest outflow of BTC, with 153k BTC (worth approximately $3.2 billion) scurrying for an exit from centralized exchanges. pic.twitter.com/FQp2E2YkSw
—Delphi Digital (@Delphi_Digital) July 12, 2022
Since the start of 2020, BTC outflows from exchanges have far outpaced BTC inflows, rising sharply between June and July 2022.
On June 26, we saw the largest outflow of BTC: 153,000 BTC (worth approximately $3.2 billion) seeking to exit centralized exchanges. pic.twitter.com/FQp2E2YkSw
Leveraged liquidity rises above $25,000
One last tidbit about the factors keeping bitcoin in its current trading range was offered by researchers at Jarvis Labs, who provided the chart below showing the dark bands of liquidity that exist below $18,000 and above $25,000.
According to Jarvis Labs, the emergence of highly leveraged liquidity signals the possibility that BTC could rally to $25,000 barring any unforeseen negative events.
Jarvis Labs said:
“The caveat here is that for the price to threaten that level, no more skeletons can be exposed within the cryptocurrency market, otherwise more forced selling can be triggered.”
Although it remains to be seen which way the BTC price will move, the one thing traders should prepare for is the possibility of increased volatility in the coming months.as rising global tensions, rising inflation and widespread pessimism suggest that the cryptocurrency market and the world at large may be in the midst of a protracted bear market.
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