Bitcoin (BTC) starts a new week in uncertain times after recovering $ 9,000, but where is BTC / USD headed in the coming days?
Cointelegraph Markets highlights five factors driving Bitcoin’s price action for the coming week.
Stock optimism returns with $ 9K
After a major drop on Friday, stock futures were gaining early on Monday, despite constant pressure from Covid-19 concerns.
Dow Jones, S&P 500 and Nasdaq futures rose modestly, cementing a quiet weekend that saw Bitcoin outperform in terms of volatility.
BTC / USD, which has shown a tendency to copy stock market movements in recent weeks, briefly lost the $ 9,000 support on Sunday before regaining the level.
In fact, the move had been made to wait: For most of last week $ 9,000 was tested in a slow fight below five figures.
Further weakness in the S&P 500, with which Bitcoin has a 95% correlation in recent months, could be particularly damaging in the short term, operator Tone Vays warned Thursday.
However, some traders were optimistic. Cointelegraph Markets analyst Michael van de Poppe noted that even at the recent lows of around $ 8,900, Bitcoin is still up 140% from March.
A BTC investment is still well ahead of stocks for the second quarter, with gains above 40%.
Bitcoin vs. S&P 500 3-month chart. Source: skewed
Difficulty can be reduced again
The bearish momentum of last week seemed to affect the fundamentals of the Bitcoin network. The difficulty, set for an adjustment in about 30 hours, has changed negatively.
If the trend continues, a downward shift would contrast with the 15% increase observed during the last adjustment two weeks ago.
Difficulty is an essential mechanism that ensures miners are incentivized to participate in the Bitcoin network, and automatic adjustments function as “economic policy”.
Bitcoin’s hash rate has also stabilized, having inversely seen gains of around 10% last week. The weekly average activity was 115 EH / s at the time of publication.
Bitcoin graph of average difficulty of 7 days and 2 months. Source: Blockchain
A small BTC futures gap opens
A potential price point, although not far from the current price, is a “gap” that was left in the CME Group Bitcoin futures market over the weekend.
As Cointelegraph often points out, if futures start on Monday trading at a different location than they ended the previous Friday, BTC / USD tends to rise or fall to fill the hole.
This week, the gap is between around $ 9,180 and $ 9,250 – $ 100 more than the print time levels.
On Friday, a giant expiration in Bitcoin options with an open interest of almost $ 1 billion had no significant impact on the price, contrary to expectations.
However, derivatives are seen as a major market factor for Bitcoin, with volume and open interest regularly hitting new highs among traders.
CME Bitcoin futures chart showing the gap. Source: TradingView
Fear triumphs over greed among Bitcoin investors
On the part of everyday traders, the mood seems to have changed little since last week. According to the Crypto Fear & Greed Index, a measurement tool dedicated to trader sentiment, “fear” still abounds.
The tool uses multiple factors to compile an index from 1 to 100, with a higher score signaling that operators are unreasonably optimistic and should be corrected.
The Index’s current score is 41, nine points less than last week’s highs since June 24. That brief spike came as prices rose following rumors that PayPal was gearing up to back the cryptocurrency.
Crypto Fear & Greed Index 1-Month Chart. Source: Alternative.me
Data showing exchange balances show that there are now fewer in exchange wallets than at any other time in 13 months, a sign of a lack of interest in selling among consumers.
Miners ease BTC sale
Mining sentiment will continue to be under the spotlight in the short term after June saw periods of strong sales.
According to data from the chain analysis resource CryptoQuant, the mining group’s output calmed down towards the end of last week after a spike on June 24.
As Cointelegraph reported, that has likely been fueled by two Chinese groups, with the fate of the 7,000 BTC that can be sold on the market.
Meanwhile, June 26 saw an increase in smaller group departures, CryptoQuant added.
The miners have come under pressure since the May cut in half, which cut their revenue from block rewards by 50% overnight.
Bitcoin mining group issues 1-year chart. Source: CryptoQuant
