Cryptocurrency Analysis

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BTC unsuccessfully retested $40,500 and rolled back 8% amid weak on-chain indicators and negative news: analysis and prospects

On Tuesday, July 27, the indicators of the first cryptocurrency were close to the end of the bearish phase, when the asset broke through the $40,000 mark. However, bitcoin failed to gain a foothold above the resistance level of $40,500. As a result, the coin fell by 2% and rolled back to the safe zone around $37,000. The main reason for the local collapse of bitcoin was the news background, which was full of unpleasant news and refutations.



On July 26, BTC closed at $39,600 and consolidated the price to successfully overcome the $40,000 mark. However, bitcoin failed to break through an important psychological milestone, after which there was a rebound, which was aggravated by news announcements that arrived in time. A few days ago, there were rumors that Amazon plans to introduce BTC as a means of payment. Many experts agreed that the growth of the cryptocurrency was partly due to these rumors and therefore was perceived critically. However, now we see that the impact of an unverified news feed on the market has been exaggerated. Indirectly, the refutation from the corporation affected the trading volumes, which sagged significantly during the company's announcement, which exacerbated the drop in bitcoin.

In addition, other negative news appeared on the market, which could put additional pressure on the asset's quotes. It is worth noting the statement of the IMF officials, who said that the introduction of BTC as an official means of payment could seriously harm the country's macroeconomy. The department is confident that cryptocurrencies are an "easy but not safe" way to simplify financial transactions. The IMF considers bitcoin to be a volatile and highly speculative asset. If the statement of the financial institution affects European markets, then Tesla's report could deal a powerful blow to bitcoin quotes. Tesla has reported a loss of $23 million amid bitcoin fluctuations. While this figure looks ridiculous, given the company's total profit of $1.14 billion, a comparison with the indicators of the first quarter of 2021 suggests itself. Then Tesla earned $100 million on buying bitcoin. It should be noted that the news announcements, although negative, are unlikely to seriously affect the current market sentiment.

The optimistic prospect in bitcoin lies in its statistical indicators. First of all, it is worth noting that after the local collapse, there is a significant increase in on-chain indicators in the cryptocurrency network. The number of unique addresses in contact with BTC during the day has increased to 930,000, which indicates a powerful upward trend in the growth of on-chain indicators. The number of active addresses on the BTC network also surpassed the 900,000 mark, and the rates of addresses spending bitcoin remain low. This indicates a bullish market sentiment and a continued rally in bitcoin quotes. Positive dynamics is also visible in the behavior of large cryptocurrency holders. Over the past ten days, the whales have purchased 40,000 bitcoins, and the total investment in the last 6 weeks amounted to $6.3 billion. Also, do not forget about the recent short squeeze that launched a new phase of accumulation. In the short term, this will allow to completely level the distance between the real value of BTC and on-chain indicators.



As of 11:00 UTC, bitcoin is quoted at around $37,500. The asset has faced serious resistance and is trying to consolidate the price for another attempt to jump by $40,500. Gradually, the hourly dynamics of price changes become positive, and the main technical indicators on the one-hour chart indicate the formation of bullish signals. In the four-hour time frame, the situation with the cryptocurrency is more complicated due to the strong pressure of the correctional area and the possible profit taking by some players. In the short term, bitcoin will be able to approach the $40,000 mark and try to break it. However, judging by the growing rates of accumulation, the market is not yet ready to push the coin beyond $40,500.






Artem Petrenko
Analytical expert
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