Bitcoin is headed into the new trading week at an inflection point, as there are a number of different narratives in the market right now. However, BTC has yet to truly attach itself to any of these narratives yet.
The major market themes at the moment are the expected non-action by the Fed at the next policy meeting, the ongoing stock market rally, driven largely by A.I. tech optimism, plus fears about a coming liquidity crunch.
|
|
Some merit can be given to the theory that Bitcoin could simply start to rally as the Fed RateWatch Tool continues to plunge. It's certainly plausible.
We do also have to keep an eye on this scenario next week as we head into the Fed "Blackout Period" whereby no Fed members comment until the June decision.
We also have the upcoming CPI report on the 13th of June. This report is due just one day prior to the Fed decision, leaving the market wide-open to rally in the meantime.
Some analysts, and notably the likes of influencers such as Arthur Hayes, believe that CPI will bottom out in the summer and come back with a vengeance in the later part of the year.
In such a scenario we could probably expect to see Bitcoin rallying somewhat. It does make sense that crypto attaches itself to a lower low in CPI and Fed ending its rate cycle narratives.
If Bitcoin makes all the right moves technically (holding above $26,200-$26,800 ), I think it's worth exploring the positive fundamental developments that could suggest some upside might be on the way.
One very interesting observation is the recent switch by super whales to move back into accumulation mode.
Data from both Glassnode and Santiment aligns, and shows strong supportive evidence of massive accumulation by extremely large BTC whales over the past few days.
Glassnode state that its Accumulation Trend Score metric shows that the largest of Whales continue to aggressively accumulate, whilst all other major cohorts experience heavy distribution.
Check out the huge spike in Super Whales accumulation recently according to Supply Distribution data from Santiment in the above chart.
It's always interesting to think of the motives that deep-pocketed whales have when they buy BTC, and the reasons behind it.
It is also noteworthy that BTC Miners have recently started to Accumulate large amounts of Bitcoin in the past week or so.
Miners are typically considered the "Smart Money", so it could be they see the latest price dip as a great time to buy BTC.
Across current market conditions, BTC Miners are actually becoming profitable, however, it should be noted that Fees on the network rose with the Ordinals protocol and thus provided miners relief, but have since fallen back to normal levels.
Following a period of significant capital outflow, the Realized Cap for Bitcoin has also started to stabilize and is beginning to record a net capital inflow once more. This is encouraging.
However, when compared to prior Bull Market conditions, this trend remains in its infancy, both in duration and magnitude, thus leaving BTC vulnerable to minor, but not massive, pullbacks.
On the technical front, some traders are confidently stating that Bitcoin needs one more drop to "close the gap" below $20,000.
To me, this argument appears weak as Bitcoin also has a number of gaps higher up, most notably at $36,000.
Perhaps the Bollinger Band indicator holds some clues, as the Bands are at their narrowest since the January up move.
Personally, I think one can make a case for Bitcoin moving in either direction technically right now. A recovery to $30,000 would not surprise me, neither would a drop to $24,000.
The Bollinger Band clearly shows that the next big breakout could happen once the $27,900 to $26,200 range is broken.
However, false breakouts are very common with the Bollinger Band indicator, and I think it's still wise to be cautious about any recovery towards $28,000 without some substantial bullish evidence on-chain arriving.
The Biyond Atlas indicator is currently generating a Strong Sell signal. Note that this indicator is inverted and the upward movement actually means sell pressure is increasing.
Overall, it's possible Bitcoin could rise in the coming weeks, there is growing evidence that more minor downside could be on its way before that recovery commences.
