Bitcoin price action continues to be characterized by low volatility, with the short trading range tending to tighten. Perfect scenario for a price and volatility compression, which sooner or later will favor an impulsive price movement.
In fact, in the last few days trading has mainly taken place between 32K and 34K, but bitcoin doesn't seem to have the strength for an upward break yet.
At the time of writing, the main cryptocurrency is trading at around $33200.
Market capitalization at $1.370 billion and BTC dominance index at 46%.
Bitcoin yesterday failed to gain a foothold above 34K and updated local lows just above 32.5K.
Investor sentiment on the cryptocurrency market is permeated by fear and uncertainty, with the fear and greed index at 20 points (extreme fear). This obviously encourages the proliferation of short positions, as evidenced by the aggregate funding rate of the major crypto-derivatives exchanges, which has been negative for weeks now.
The capitalization of the entire market has fallen back below $1.400 billion, with the top alts suffering particularly badly in this phase.
Regarding the price action in the short term, it is very important to overcome the resistance at $ 34,000, otherwise the risk of another test of 32K will be concrete and a failure of local support will open the door to the psychological threshold of 30K (which still remains a very strong and important support, but which weakens with each impact).
However, in such an environment, large investors continue to actively accumulate Bitcoin and exchange balances fall by an average of 2000 BTC per day.
According to analysts at Santiment, since the beginning of July, addresses with a balance ranging from 100 to 10,000 BTC have increased their allocations by 60,000 BTC.
OUR MARKETS VIEW
At this point it is interesting to pause and reflect on this accumulation by whales on the $ 30 K threshold (which is also the support line). The big investors have entered at $ 30 K and are able, unlike short-term traders, to hold their position for a long time and then resell at a higher price ($ 60 K or more), even enduring momentary virtual losses. Normally in the market there are phases of accumulation and phases of distribution. The behavior of the whales suggests that this is indeed a momentary accumulation phase and that expectations are for an increase in the price of BTC.
Given the above, it is our opinion that at this time the prices of the crypto market are very attractive for an entry, its mode is put to the sensitivity of the investor.
We point out that there are some interesting projects we are following among altcoins that have a much higher price potential than BTC and that are in an interesting position for an entry (just yesterday we entered on LUNA that in the past months reached ATH around 0.21, so right now it is discounted by 62%, but in the past days we also entered on DOT). The suggestion is to carefully evaluate your portfolio by weighing each investment.
Diversification is the key to maintaining a stable trend over time.
In the next articles we will try to explain what are the mechanisms that are characterizing the current market cycle.
DISCLAIMER
We are not giving any financial advice regarding cryptocurrencies, but rather giving applicable advice for new, intermediate and experienced people who are currently into cryptocurrencies or someone who is just now realizing what it is. Before you read this I must say that this blog will be based on the assumption that you have already done some research on cryptocurrencies and the Blockchain ecosystem. We will continue to provide explanations and details to the best of our ability, however we encourage you to do your OWN research because only YOU will know how this second financial revolution will best fit into your life. That said, I hope you are as excited as we are and thank you for reading our contents.