Will Bitcoin Revisit $7k Levels Before the Next Rally?
Since the May 11th halving event, Bitcoin has traded in a tight range between $9,000 and $10,000. While even the most bearish of Bitcoin advocates believe a rally is imminent, many seem undecided on whether the price will first revisit lower levels.
Recent analysis from Glassnodes indicates that 60% of BTC investors have been holding on to their assets for more than a year – a level previously seen just before the 2016/2017 bull run. However, it’s pertinent to note that in 2013 just after the first halving this metric was at around 50%. It then began dropping as the price rallied and investors began selling.
Two years later when it had regained the same 50% level the price of BTC continued to drop for a further six months before recovering. Eventually, only when the metric had reached 60% did the 2016/2017 rally begin in earnest. This suggests that we could see a further price drop and period of consolidation before the next halving rally begins.
$10k resistance holding
BTC/USD’s continued struggle to break resistance at $10k adds further strength to the probability of this outcome. Bitcoin has now been rejected three times at the $10k resistance level – a common sign that a downward trend reversal is coming.
However, with BTC’s daily, weekly, and monthly Moving Average Divergence Convergence (MACD) indicator looking likely to cross bullish there is still the possibility of an upward move. However, to do this it would need to escape the current descending channel by breaking above resistance at $9,700.
If this doesn’t happen we are likely to see a move back down to $8,000 territory, with support at $7,400. For investors holding some capital in the wings, this would be an excellent level to buy back in at before the next halving rally.
Several altcoins have been seeing big gains lately which is another indication that BTC may start dropping soon. Investors often move money out of BTC and into altcoins when they expect BTC could turn bearish in the near future. Over the past seven days, Ethereum (ETH) is up 15%, Litecoin (LTC) is up 8.4%, and Bitcoin Cash (BCH) up 8% while BTC has seen only 5% gains.
Two of the biggest winners in the altcoin market today are Cardano (ADA), up 18%, and Stellar (XLM) up 7.3% in just the past 24 hours. Cardano has seen particular interest following the news that it’s mainnet will launch soon. The mainnet hard fork, dubbed Shelley, has been given a confirmed launch date of July 29th with staking available from August 18th. The news puts the price of ADA up by over 50% this week.