InstaForex

July 8, 2021

Miners' revenues are falling, investors are waiting for negative news from America

 Over the past trading day, nothing has changed for bitcoin, neither fundamentally nor technically. However, not much has changed for the "digital gold" over the past two months either. So far, the bitcoin quotes continue to be in a sideways channel, which is limited by the levels of $31,100 and $40,700. This channel is wide enough, but at the same time, for Bitcoin, $10,000 is not such an impossible task. The fact that Bitcoin volatility has dropped drastically at this time is another matter. Earlier, during an upward trend, 5-6 thousand dollars bitcoin passed in one day. However, what is happening now is what should have happened to Bitcoin before. After the upward trend was completed, which we warned about in advance, since there were several prerequisites at once, the quotes immediately fell down, and then a period of consolidation began. This period can last long enough, and can also alternate with periods of correction. From our point of view, bitcoin will now be in a correction for a year or two, within which it can drop to $20,000 per coin, and maybe even lower. Recall that after the trends of 2013 and 2017, bitcoin inevitably lost up to 90% of its value, and the subsequent consolidation took about 2 years. Considering the fact that in 2020, the rise in the value of bitcoin began due to the pandemic crisis (that is, in some way by accident), it is not surprising that there are not enough investors now who would be able to keep the bitcoin rate on high.


Meanwhile, many crypto experts continue to bet on bitcoin whales in the hope that they will ultimately save the digital gold. According to several analytical portals, the number of coins on wallets with balances from 1,000 BTC to 10,000 BTC continues to grow and already amounts to 4.2 million coins. In total, there are almost 2000 such wallets. Experts believe that since February, the whales have been actively unloading their balance sheets, since the fundamental background was very weak, which led to the end of the bullish trend. However, now, experts say that the market has absorbed much negative news and stayed above $30,000, which may become a starting point for a new upward trend. We do not support this point of view, but it takes place.


It is also reported that the income of bitcoin miners in June decreased by almost half compared to May. The reasons are the decrease in the cost of bitcoin, as well as the decrease in the number of transactions on the network. From our point of view, everything goes to the fact that the negative fundamental background will continue to put pressure on the bitcoin quotes. Moreover, the process of evicting miners from China has just begun, and the entire crypto community is still waiting for news from the United States, where the authorities can also very seriously "tighten the screws."


Technically, Bitcoin fell to the $31,100 support level five times and bounced off it five times. Therefore, at this time, Bitcoin can continue a new round of movement to the upper border of the side channel - the level of $40,700. However, we believe that Bitcoin continues to target the $31,100 level, and we fully support this scenario. The consolidation of quotes below the level of $31,100 may signal the readiness of traders and investors for new sales. Many experts are in favor of the fact that the main cryptocurrency will continue to fall in price and may fall to $19,000 - $24,000 per coin. And some even call the figure $10,000.


The 4-hour chart also has an excellent benchmark that is very helpful in trading. This landmark is the trend line, which already has three pivot points. In addition, the bitcoin quotes almost ideally bounced off the Senkou Span B line twice. Therefore, the consolidation of quotes below the trend line may provoke a new movement down to the levels of $31,100 and $29,700. In this case, we recommend selling Bitcoin.