Bitcoin hovers around the $19,000 mark as a new week begins. The largest cryptocurrency, is constantly being influenced by the external environment as the speculations of lower levels seem more omnipresent. Even the widely followed Pseudonymous trader Capo sees no light at the end of this tunnel.
After a quiet weekend, hodlers find themselves stuck in a narrow range while the prospect of a breakout to the upside appears increasingly hard to believe.
one trader and analyst singled out July 4 as the site of a “wild run to the downside” for crypto-markets. The countdown is on for Bitcoin to weather the aftermath of the latest Federal Reserve rate hike.
What else could the coming week have in store? Allin1bitcoins takes a look at the potential market-moving factors for the days ahead.
Bitcoin Holds Its Own Over A long Weekend
Bitcoin emerged from the weekend unscathed, but the classic pitfalls of off-peak trading remain.
The United States will not return to trading desks until July 5. This provides ample opportunity for some classic weekend price action in the meantime.
So far, the market has held off when it comes to volatility. That is – with the exception of a brief spike to $18,800, Bitcoin/USD – it has circled the area between $19,000 and $19,500 for several days.
Even the weekly close provided no real trend change. Data from Cointelegraph Markets Pro and TradingView showed this, with the psychologically significant $20,000 unchallenged.
The U.S. dollar, meanwhile, continued to hold near twenty-year highs after returning from its latest retracement defiant. The U.S. dollar index (DXY) stood above 105 at the time of writing.
Current Gold Position Questions Bitcoin’s Ability To Break Off Macro Trends
With Wall Street closed for Independence Day, U.S. equities can take a breather on July 4th (today).
In a Twitter thread, gold monitor Patrick Karim flagged the metal as about to hit a historical “blast off” zone. A “blast off” zone against the S&P 500 (SPX).
After bottoming out at the end of 2021, the ratio of gold to the S&P has recovered throughout this year and is now about to cross a boundary, which has historically led to significant upside afterward.
The situation cannot be said to be the same in U.S. dollar terms, with USD strength keeping XAU/USD firmly in its place below $2,000 since March.
The forecast again calls into question the extent of Bitcoin’s ability to break with macro trends. A breakout against Bitcoin for gold would be the natural knock-on effect should Karim’s scenario play out, thanks to the ongoing correlation with equities.
Mining Bitcoin Has Now Become Even Harder
Despite considerable concern over miners’ ability to withstand the current Bitcoin price downturn, Bitcoin’s network fundamentals remain calm.
An impressive testament to miners’ resolve to stay on the network, the difficulty is not planning to reduce at the upcoming readjustment this week.
According to estimates from on-chain monitoring resource Bitcoin.com, difficulty will even rise should current prices stay the same. Furthermore, adding 0.5% to what is a metric still near all-time highs.
When it comes to miners themselves, opinions consider that it is the less efficient players — possibly newcomers with higher cost basis — who have been forced to exit.
Data uploaded to social media by CEO of asset manager Capriole Charles Edwards last week put the production cost for miners en masse at around $26,000. Of that, $16,000 is electricity, meaning that miner overheads directly influence their ability to limit losses in the current environment.