With the price standing firm above $65,000 and technicals hinting at a market bottom, the Bitcoin relief rally is building steam. Tony Edward of Thinking Crypto has put together an analysis of the latest developments and what they mean for those with capital in the market.
Technical Analysis: Bullish Indicators Strengthen
At present, Bitcoin is in the vicinity of $65,523, with bullish divergence on the weekly chart underscoring the strength of the move. The numbers are encouraging, says Edward. For one, the MACD is still in the green, a clear sign of bull dominance. Then there is the RSI, which sits well above neutral territory; in the past, that has been a precursor to more upside. All in all, such technicals would have traders and investors thinking this rally is putting an end to the recent slide.
On-Chain Metrics and Market Sentiment
In a piece for Thinking Crypto, Blockchain Backer, one of the analyst set, pointed to some telling figures: Bitcoin’s supply in loss is now at levels one would expect to see at the bottom of a bear market. This metric gauges how much of the coin is being held at a loss and, in this case, it speaks to capitulation on the part of holders, a sure sign of a bottom taking shape. On top of that, there is less downward pressure as long-term holders have seemingly put an end to their selling, making for a steadier price. All told, these changes in sentiment and on-chain data are what give the current relief rally its foundation, pointing to a more substantial shift in market structure and a better chance of a lasting recovery.
External Factors: Media and Regulatory Developments
Bitcoin’s momentum is being shaped by more than just on-chain data and technicals; external narratives are playing a part as well. There is close attention on Jim Cramer’s persistent bearishness. Tony Edward has pointed out the ‘inverse Cramer effect’, a historical quirk where prices have a way of going against Cramer’s calls, leading some to speculate his current negativity may well be followed by more upside.
Then there is the matter of regulation. Optimism is mounting over the Clarity Act, with Thinking Crypto reporting that industry sources have put forward an ethics package from the White House in hopes of moving the legislation along. The industry’s resolve for better crypto rules is evident in the case of Patrick Witt, who has put off his military training to see the bill cross the finish line ahead of the August 7th date. Were such policy clarity to come to pass, it would be a welcome tailwind for the relief rally in Bitcoin, giving both the institutional and retail sides of the market added confidence.
Source — Thinking Crypto: https://www.youtube.com/watch?v=OZbtw62Kj3U