- Crypto analysts believe that Bitcoin has already formed a local bottom, however, BTC continues to struggle to break above its 200 EMA.
- We are already in 30-day bitcoin miner capitulations and some signs are emerging that it may end soon.
Over the past 24 hours, the cryptocurrency market has shown a strong reversal. Earlier today, the price of BTC soared as much as 8%, surpassing $22,000. However, Bitcoin has partially pulled back and is currently trading up 5.5% at a price of $21,667.
The altcoin space also joined in the fun with Ethereum (ETH) surging 7% above the $1,200 levels. On the weekly chart, Bitcoin (BTC) and Ethereum (ETH) posted double-digit gains.
The rest of the altcoin industry also seems to be following suit. Popular altcoins like Solana (SOL), Polkadot (DOT), Polygon (MATIC), and Cardano (ADA) are all up 4-5%.
Well, the recent price surge in the price of Bitcoin could be due to a sharp pullback in US stock indices over the past week of trading. Bitcoin (BTC) shares a very close relationship with the Nasdaq Composite (INDEXNASDAQ:.IXIC) which is up over 5% this week.
Bitcoin Local Fund
Some crypto market analysts believe that Bitcoin has already formed a local bottom. This means that prices could rise in the short term. Dan Held, who manages growth at Kraken, said “mass contagion” in the crypto space appears to be contained by FTX. He further mentions a few other points that could act as a catalyst for Bitcoin and the wider crypto space.
Was this the bottom for Bitcoin?
– Mass contagion seems contained with FTX
– Celsius repaying his BTC loan
– Bankruptcies already filed
– Inflation fears cooling
— Dan Held (@danheld) July 7, 2022
However, Bitcoin and Ethereum faced rejections at their 200-day moving averages. Caleb Franzen, Cubic Analyst wrote:
Another important test for $ETHBTC, this time on the 200-day moving average cloud (EMA & SMA). This teal range was former support, now acting as potential resistance. If we can break above this range, it could be a key risk signal.
However, as long as BTC remains below its 200 EMA, no lasting price reversals can be predicted in the future. Thus, there is always a possibility that Bitcoin corrects further.
— Lark Davis (@TheCryptoLark) July 8, 2022
Bitcoin Miners Surrender
Another area to watch is miner capitulation. Bitcoin miners have sold off massively over the past month. As the price of BTC corrected by 33% in June, miners had to liquidate a large portion of their Bitcoin holdings in order to cover operating costs. Speaking to Decrypt, Blockware analyst Joe Burnett said:
We are 30 days into a miners’ capitulation (according to the hash tape metric), and there are signs that it is potentially ending soon if the price doesn’t fall further. The miners’ capitulations add to short-term selling pressure as miners liquidate their BTC treasuries to continue operations.
Does that mean the miners’ capitulation is over at this point? Well, not much can be said at the moment. Few of the big Bitcoin mining giants like Marathon Digital continue to hold their BTC and have not sold any BTC since October 2022. As of June 30, Marathon holds 10,055 BTC. However, Marathon said that they might consider selling some of their holdings to raise cash as they continue to expand their mining operations.