July 08, 2024

Trend reversal in the market or further setbacks ahead?

Thought of the week

Market setbacks and negativity are phases in trading that often need to be met with patience. The subsequent opportunities and good entry points offer chances for subsequent profitable trades. Therefore, short to medium-term consolidations and setbacks are not necessarily something that has negative consequences for trading.

Digital Asset News

Bitcoin’s mining difficulty fell by more than 5% to a quarterly low of 79.50 terahashes (79.5T) on July 5. This also marks the sharpest drop since March, when the difficulty briefly fell below 80T.
The difficulty for mining BTC skyrocketed between March and May, reaching a new all-time high of 88.10T before slowly leveling off to its current level.
Towards the end of 2017, as Bitcoin adoption began to rise, hashrates reached the Terahash mark for the first time. And today, the value is still well within this range, even with smaller declines.
At the current Difficulty of 79.5T, mining pool F2Pool estimates that an ASIC rig with a watt-per-terahash efficiency rate of 26 or better (lower) would be profitable as long as the Bitcoin price does not fall below the $54,000 threshold.

At a BTC price of USD 54,000, ASICs with a unit power of 26 W/T or less can still make a profit. We estimate this at USD 0.07 per kWh.”
If the Bitcoin price drops, more efficient mining equipment will be needed to keep miners profitable. If the price stays the same, conditions should be acceptable for at least the largest miners, especially where there are energy subsidies for mining equipment.

Spot Bitcoin ETFs saw a surge in inflows today, July 6, after the Bitcoin price fell below $54,000 on U.S. Independence Day and July 4, respectively.
The Fidelity Bitcoin ETF (FBTC) led the inflows with an impressive USD 117 million, underlining the strong investor confidence in the fund. Following FBTC, the Bitwise Bitcoin ETF (BITB) saw a net inflow of USD 30.2 million, while the ARKB and HODL ETFs saw inflows of USD 11.3 million and USD 12.8 million respectively.
In contrast, the Grayscale Bitcoin Trust (GBTC) saw net outflows of USD 28.6 million, in stark contrast to the positive trend in other Bitcoin ETFs, and despite the recent market turmoil, the significant inflows into these ETFs suggest that institutional investors and large buyers are taking advantage of the current bear market to accumulate Bitcoin at lower prices.

Hunter Horsley, the CEO of Bitwise Asset Management, highlighted in a post on the social platform X the efficiency of his team in acquiring Bitcoin, which managed to do so at a cost of less than half a basis point.
“The outlook for Bitcoin has never been better. For many who have not yet taken the plunge, this week is the chance to buy the downturn,” said the expert.
The large former crypto exchange Mt. Gox has begun repaying its debts in Bitcoin and Bitcoin Cash.
According to the reorganization plan, repayments will now be made to some creditors via certain crypto exchanges.

According to an X-Post by crypto information service MtGoxBalanceBot, the total Bitcoin balance on all known addresses of the Mt. Gox trustee is 94,457 BTC, with 47,288 BTC now moved from these addresses.
Repayments to the remaining creditors will be made “immediately” after several conditions have been met.
These conditions include confirmation of the account’s validity and the creditors’ stated intention to sign the repayment agreement with the designated crypto exchanges.

In addition to ensuring secure repayment, discussions on the repayment arrangements between the trustee and the exchanges must first be finalized.

Mt. Gox was founded in 2010 by Jed McCaleb and was one of the largest Bitcoin exchanges, handling 70% of the world’s BTC transactions at its peak. McCaleb sold it to Mark Karpelès in 2011. “On July 5, 2024, the Reorganization Trustee made a blockchain transfer of the BTC/BCH amount to be repaid to you as a base repayment and early lump sum repayment or interim repayment.” This means that the repayment of bitcoins that have not been moved for around 10 years will now begin!

Digital Asset Market:

Market report including trading idea

The majority of digital assets experienced a strongly negative week, which was characterized by sell-offs and price losses.
After the SEC postponed the Ethereum Spot ETF filings to the end of July and high selling pressure from various channels put the market under pressure, most digital assets lost important support zones and were unable to maintain the fundamentally positive sentiment. Thus, some market participants took advantage of the inactivity of Americans on their holiday (July 4) to prepare for the price declines. No high volumes in the Bitcoin spot ETFs and strong selling from the mining sector, which has apparently not yet stabilized since the Bitcoin halving, ultimately made for an atypically negative week for the digital assets.
On a weekly basis, the overall market performance was around -13%.
The message for the coming week is: New support zones could bring volatile upswings, but the risk of further setbacks is still present.

Chart technicals

From a technical chart perspective, Bitcoin is now well below the trend channel between $60,000 and $70,000. The support zones at ~$60,000 did not withstand the pressure and a new support phase around ~$55,000 is currently dominating the market. A return to last week’s levels seems to be the goal, but this should not be expected in the short term.

The next price targets in the event of a positive development: ~$57,500, ~$59,000, ~$62,000

The next price targets in the event of a negative performance: ~$54,000, ~$52,300 ~$50,000

Trading idea

After support retracements, almost all digital assets offer good buyback points. In particular, assets from the top 50 in terms of market capitalization, which have experienced above-average sell-offs, offer good opportunities!

Weekly overview

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