Bitcoin (BTC) starts a new week with a pleasant high thanks to a boost from a familiar source, Elon Musk. Are the good times back?
After spending weeks languishing near $ 30,000, Bitcoin has managed to make a sustained comeback to line up an attack against a major resistance.
With chain indicators flashing bullish, there may be a possibility of a breakout, but analysts and traders are far from 100% convinced.
Cointelegraph looks at five things that could influence how BTC’s price action plays out in the coming days.
Musk tweet changes the game … again
The talk of the town, once again, is Tesla and SpaceX CEO Elon Musk this week.
Firmly in disgrace after playing devil’s advocate on Twitter multiple times, Musk returned to the fray with news that previously seemed unlikely.
Tesla abandoned Bitcoin payments earlier this year shortly after announcing them and without processing any BTC transactions. This, according to Musk, was due to the allegedly inappropriate energy use involved in mining.
Widely criticized for both its logic and its impact on Bitcoin price action, Musk did not give up, and subsequent tweets on various aspects of Bitcoin and altcoins produced discernible but comparatively quiet price movements.
Now, it appears that the self-proclaimed “Technoking” has shifted its approach to social media once again.
In response to a complaint from Magda Wierzycka, CEO of financial services company Sygnia, she reopened the door for Tesla to adopt Bitcoin once again. Wierzycka’s criticism of Musk’s Bitcoin impact was covered by Cointelegraph last week.
“When there is confirmation of reasonable clean energy use (~ 50%) by miners with a positive future trend, Tesla will resume Bitcoin transactions,” Musk answered, adding that Tesla still had 90% of its initial $ 1.5 billion BTC purchase.
BTC / USD enjoyed the news, topping $ 39,000 to seal daily gains of over 12% at the time of writing.
Indicators produce a mixed narrative
As Cointelegraph reported over the weekend, the bulls case is supported by a number of chain indicators.
Analytical tools, covering price versus active addresses, Spent Production Profit Index (SOPR), and stock flow, strongly point to an undervalued Bitcoin at current prices.
As such, predictions of a short- and medium-term comeback are coming in: One asks for $ 85,000 in the coming months, while the creator of the stock-to-flow model, PlanB, still thinks $ 100,000 is plausible this year.
On Monday, meanwhile, there are two other charts to consider, with one being a less frequent visitor than the other.
Related: VORTECS report: when this indicator is lit, LUNA, MATIC and EGLD usually gain 10%
What indicated By PlanB, among others, the Bitcoin mempool has seen a major reset this month, which means that transactions are currently extremely cheap compared to the expected processing time.
Not only is this a “good time” to reorganize and consolidate one’s BTC portfolios, but as Cane Island Alternative Advisors investment manager Timothy Peterson argues, the mempool is now back where it was before Bitcoin started. its parabolic rise in late 2020.
“The bitcoin mempool is a good indicator of bubbles,” he summed up in a series of tweets on Sunday.
“The mempool is where pending transactions wait to be processed before being added to the blockchain. This week it has disappeared for the first time since November 2020 (before the bubble) “.
Continuing, he cautioned that the lack of demand reflected by the empty mempool means that price action “should” trend downward in the coming months.
Meanwhile, this lack of demand has clearly become noticeable on exchanges. As highlighted by on-chain monitoring resource CryptoQuant, both entries and exits from exchanges have dropped considerably.
Conflicting feeling in $ BTC negatively impacts withdrawals and deposits from exchanges
– Input directions are decreasing
– Exit directions are declining and hit a 1-year low of 15.5K
– CryptoQuant.com (@cryptoquant_com) June 14, 2021
The $ 40,000 battle is on
Traders who wake up on Monday will be interested in one level in particular thanks to the latest acceleration of Bitcoin.
Having waited for a decisive move during weeks of price compression, there is now a real chance that they will witness an attack to $ 40,000 and potentially more.
This would be significant in and of itself: Estimates generally call for lower prices in the short term before a rally, but so far Bitcoin has refused to comply.
“You should take one more step before waiting for any correction,” popular trader Crypto Ed said. saying On Monday in the morning.
“For now, I only see intraday trade set up with a low TF.”
He added that he would be waiting for lower levels to be reached before a possible entry trade, but that in the meantime, BTC / USD could hit $ 47,000.
Shorters were mocked, with Crypto Ed pointing out that many would already be lost or liquidated against a backdrop of bullish sentiment and MicroStrategy on the verge of buying another $ 500 million worth of BTC.
“How does it feel? To be underwater in your short position and realize that Saylor is ready for a new $ 500mm shopping spree?” He additional, referring to the company’s CEO, Michael Saylor.
At the time of writing, BTC / USD was circling $ 39,500 after hitting local highs of $ 39,783 on Bitstamp.
The fundamentals reflect the disorder of the miners
Away from the chain, the fundamentals of the Bitcoin network, meanwhile, seem a little less solid.
As the debate over Bitcoin energy progresses, miners continue to face pressure from China in particular, where a shakeup of who can mine using local energy is underway.
Some see this as a crackdown and even a ban on Bitcoin’s main mining power source, while others argue that miners, as always, will simply adapt to the changes and move elsewhere. This could also result in a transfer of the hashrate’s domain to another jurisdiction.
El Salvador, the first country in the world to convert Bitcoin to legal tender, is already working on its own geothermal mining facilities, becoming the latest party in the so-called Bitcoin hash war.
However, so far the trend is downward. According to monitoring resources, Bitcoin’s hash rate is shrinking, with 10 exahashes per second (EH / s) removed in recent days.
Since the hash rate is an estimate, different sources have different numbers, and the current 113 EH / s represents about two-thirds of the highest 168 EH / s this year.
Meanwhile, the difficulty decreased 5.3% on Sunday, with another decrease on the cards for the next automatic reset in two weeks.
Related: Bitcoin Price Moves Toward $ 40K As On-Chain & Technical Analysis Favors Bulls
Volatility says the top is NOT in
Finally, for a hedge fund manager, there is no indication of a peak price for Bitcoin.
Coupled with data from Bloomberg Intelligence, Dan Tapeiro, founder and CEO of DTAP Capital, the volatility is simply too low to suggest a local ceiling.
“Bitcoin has never surpassed such low volatility. We still have a great advantage. Twtr sht too negative termers, “he said in part of a Discussion on Twitter on Monday.
He added that despite Saylor and MicroStrategy, corporate adoption in the United States was “unlikely,” but that Bitcoin remained the “biggest macro event of all time.”
Countries like El Salvador also have enormous potential to carry out copycat movements.
Tapeiro drew attention to Bloomberg’s claim that $ 100,000 in 2021 would be a “meager” target for BTC / USD.