Bitcoin ends another working week’s trading with surprisingly little volatility, but macro factors may mean the market does not stay calm for long.
With no two weeks the same in Bitcoin, the mood can change in an instant, with the past five days marking some welcome respite for traders after previous price action.
Modern Consensus provides a weekly overview of the latest movements for BTC/USD, complimenting the Monday markets outlook, the latest edition of which can be found here.
BTC price contends with bearish dollar and bullish stocks
Friday began with Bitcoin exhibiting the same price behavior as it had done throughout most of the week—an increasingly narrow trading corridor below $12,000, marked by support at $11,500.
The status quo has seen no challenges since earlier this week—bulls have so far failed to regain definitive control and move Bitcoin beyond the psychological $12,000 level.
Since a dip to $11,500 ended in a refocusing for BTC/USD on $11,700, little motivation has appeared to change a return to price behavior before July’s gains. Before hitting $12,400, highs not seen in over a year, Bitcoin spent multiple weeks closing a series of higher lows and lower highs, driving a narrowing wedge analysts called “compression.”
Versus macro factors, Bitcoin faces a mixture of bullish and bearish influences. Gold has seen a turbulent week in which it briefly regained and lost $2,000 support—action which has affected Bitcoin performance over the past month.
At the same time, stocks saw bullish action, with the S&P 500 reaching its highest levels ever. This was directly aided by weakness in the US dollar—the USD currency index remained at its lowest in two years on Friday.
“Stocks push higher following Wall St lead, but the mood remains a bit shaky as investors grapple w/tepid econ data and lofty valuations after a huge rally that has wiped out coronavirus losses. Bonds steady w/US 10y at 0.65%. Dollar resumes downtrend. Gold at $1949, Bitcoin 11.8k,” market commentator Holger Zschaepitz summarized on Friday.
Earlier, Zschaepitz showed a curious new trend in Bitcoin—price rises in line with rises in the balance sheets of G4 central banks.
The trend has become pronounced since March, when coronavirus-based interventions began distorting markets to a much greater extent than previously.
For Robert Kiyosaki, the well-known author who has become a regular Bitcoin pundit, the cryptocurrency now forms part of an essential hedge against incoming catastrophe on fiat markets.
“Not a time to ‘Think about it,’ he warned about those sitting on the fence with safe havens on Friday.
“How much gold, silver, Bitcoin do you have?”
Bears stay out of analysts’ BTC price forecasts
If short-term forces were not an issue, however, general consensus around Bitcoin’s strength remains firmly bullish.
As Modern Consensus reported, stalwart traders have little reason to fear a bear market, with the worst case scenario involving buyer support kicking in at $10,000.
John Bollinger, creator of the Bollinger Bands volatility indicator, called the current Bitcoin rally “picture perfect,” while quant analyst PlanB eyed $14,000 as the next price target to secure.
“…Bitcoin is nicely moving away from 200 week moving average. 200WMA is currently $6400, is increasing $200 per month, and has never decreased. Best of all, BTC monthly close has never been below 200WMA,” PlanB noted on Wednesday.
For trader Michael van de Poppe, the immediate outlook also provides few surprises—an opportunity to look for short trade positions should BTC/USD hit $12,100.
“…I personally don’t think price will drop below $11,350 (at the moment),” fellow trader Josh Rager continued.
“But I would feel much better with a reclaim of $11,900 and move back up over $12,000. Break and close back above $12,300 would be bullish.”
More exciting activity remained confined to altcoins, with assets such as 0x and Ampleforth putting in major gains over the past 24 hours.
The standout on Friday was OMG Network, which unexpectedly delivered returns of over 60% in the same period. The phenomenon has become increasingly common in light of the DeFi craze, which has seen various small market cap tokens appreciate considerably within a very short timeframe.
This week, yearn.finance became the first altcoin in the history of cryptocurrency to surpass the token price of bitcoin.
Largest altcoin ether has yet to capitalize on the altcoin trend, having come off its recent local price highs as a percentage of bitcoin price.