Bitcoin Only 8% from Its All-Time High: 5 Key Points to Understand the Market This Week

Attention, cryptocurrency enthusiasts! Bitcoin (BTC) is on the brink of making history once again, with its price only 8% below its all-time high. In this article, we break down five essential points that every trader should know about the Bitcoin market this week.

1. Bitcoin’s Impressive Surge

Bitcoin experienced an astounding 12% increase last week, closing above $68,000. This rally has been described by analysts as an «extremely explosive move,» and many are wondering if this will be the final push BTC needs to reach and surpass its all-time high.

Crucial Weekly Close

The weekly close above $68,000 is considered vital. Popular trader Skew noted that $65,000 should hold as support in higher time frames for the bulls to maintain control. «Otherwise, at the start of the week, if there’s a clear market chase on the offer, $70,000 – $80,000 becomes the liquidity target to take,» Skew commented.

2. Factors Influencing Bitcoin’s Behavior

Bitcoin’s future behavior will depend on several critical factors, including institutional demand, selling pressure, geopolitical surprises, and inflation. This combination of elements could increase volatility in the cryptocurrency market.

Institutional Demand

Institutional demand is a key factor. Large investments from financial institutions can provide the necessary boost for Bitcoin to reach new all-time highs. Institutional capital not only adds volume but also instills confidence in the long-term stability of the asset.

3. Geopolitics and Inflation

Geopolitical surprises and inflation data also play a crucial role. The recent decision by U.S. President Joe Biden not to run for re-election in November has generated additional momentum for Bitcoin bulls. Republican presidential candidate Donald Trump has included a pro-Bitcoin stance in his election policy, which could positively influence the market.

Inflation Data

This week, key U.S. inflation data is expected to be released, specifically the Personal Consumption Expenditures (PCE) Index, which is the Federal Reserve’s preferred measure of inflation. The results of this data could significantly impact Bitcoin’s future price direction.

4. Bitcoin Miners Preparing for a Recovery

Bitcoin miners have been facing tough times since the block subsidy halving event in April. However, the latest data from the hash ribbons indicator suggests they may be close to emerging from this capitulation phase.

Hash Ribbons Indicator

The hash ribbons indicator, which compares two iterations of Bitcoin’s hashrate, anticipates a recovery after several months of capitulation. Historically, these capitulation phases have been followed by significant gains in BTC’s price.

5. Ethereum ETF and Its Market Impact

This week is also significant for Ethereum, the second-largest cryptocurrency. The launch of Ethereum exchange-traded funds (ETFs) is expected, which could generate volatility similar to what Bitcoin experienced earlier this year.

Implications for ETH

Traders are preparing for the volatility that could affect ETH/USD. The adoption of these ETFs by hedge funds and retirees could significantly boost Ethereum’s price. Despite this, Ethereum has shown a more modest 4% increase compared to Bitcoin’s 7% last week.

Conclusion: A Crucial Moment for Bitcoin

The Bitcoin market is at a crucial juncture. With the price only 8% from its all-time high, traders and analysts are closely watching market movements. The factors mentioned above will play a fundamental role in determining whether Bitcoin can reach and surpass its previous record.

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This news has been adapted from an article originally published on Cointelegraph.com.