The cryptocurrency market experienced reduced volatility over the weekend, with Bitcoin price stabilizing above $55,000. The easing of early week supply pressure has allowed altcoins to find strong support and establish a local bottom. However, recent transfers of 700 BTC by the German government, coupled with Bitcoin’s struggle to break crucial resistance, have raised concerns about a potential prolonged correction.
Also Read: Bitcoin Price Analysis: How Bull Flag Defends $1 Trillion Market Cap for BTC
Bitcoin Price Faces Supply Pressure as German Government Moves 700 BTC
Bitcoin Price| Tradingview
Over the past 4 months, the Bitcoin price trajectory has been mainly sideways with a slight downtick in the daily chart. This consolidation is visually traced with the flag pattern formation as the divergence trendlines offer major resistance and support.
While in theory, the Bull flap supports the uptrend continuation, the divergence trendlines indicate market uncertainty and potential for support breakdown intact. Amid the recent market, the BTC price fell from $71959 to $53500 on Friday accounting for a loss of 25.5%.
Interestingly, the falling pressure reverted precisely from the pattern’s lower trendline but failed to sustain above 200D EMA. This trend-defining slope serves as a major resistance for Bitcoin buyers, and a failure to break above it could reinforce the continuation of the downtrend.
Also Read: Spot Bitcoin ETFs Saw $143 Million Inflows on Friday, Institutions Buying The Dips?
Moreover, the German Government transferred 700 BTC, worth approximately $40.55 million, to an unmarked address identified as 139PoP…H7ybVu, according to Arkham.
According to Arkham, the German Government transferred 700 BTC to the unmarked address: 139PoP…H7ybVu at 1:07 UTC+8 today, worth about $40.55 million. This may be a deposit address of an institution or OTC service. The German Government currently holds 39.826k BTC, worth about…
— Wu Blockchain (@WuBlockchain) July 7, 2024
This transaction, conducted at 1:07 UTC+8, could be linked to a deposit address of an institution or an OTC service. The German Government’s current Bitcoin holdings amount to 39.826k BTC, valued at about $2.31 billion.
Thus, the BTC price is down 1.48% today to trade at $57390, while the market cap plunged to $1.13 Trillion. If the supply pressure from the fallen Mt. With The Gox exchange and the U.S. and German governments continue, the coin price could plunge below the lower trendline.
The post-breakdown fall could plunge the Bitcoin value to seek support at a $50000 psychological level.
Technical Indicator
ADX: The ADX value at 38% indicates an overextended downfall which may promote a sideways action before resuming the correction trend.
EMAs: A potential bearish crossover between the 50-and-100-day Exponential Moving Average could accelerate the supply pressure
Frequently Asked Questions (FAQs)
The 200-Day EMA is a technical analysis indicator that shows the average price of an asset over the past 200 days, giving more weight to recent prices.
The ADX, or Average Directional Index, measures the strength of a trend. A value above 25 typically indicates a strong trend, while a value below 20 suggests a weak trend.
A flag pattern is a continuation pattern that resembles a flag on a pole. It indicates a brief consolidation before the previous trend resumes.
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Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Armed with a strong grasp of technical analysis, he keeps a vigilant eye on the daily price movements of top assets and indices. Drawn by his fascination with financial instruments, Sahil enthusiastically embraced the emerging realm of cryptocurrency, where he continues to explore opportunities driven by his passion for trading
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
