Bitcoin Traders Became Cautiously Bearish for Some Reasons
The Bitcoin (BTC) price increased from $9,160 to $9,584 during the past two days. Even with the 4.6% gain, several traders are turning short-term bearish on the top cryptocurrency.
Based on some technical analysts, the market structure of Bitcoin stays somehow bearish. In the longer time frames, the $9,500 price might still technically be a lower high. The term ‘lower high’ means that the recent peak of BTC is lower compared to its previous highs.
Then, on June 3rd, 10th, 22nd and July 22nd, Bitcoin reached $10,473, $10,180, $9,794, and $9,584, respectively. Every peak is lower than the last highs, making it a lower high formation.
The Short-Term Bearish Bias
A few traders are bearish on Bitcoin for two reasons: a lower high structure and falling volume.
For instance, Zoran Kole, a crypto trader, stated that a bearish market structure at a higher frame is still intact. Looking at the daily chart, four straight lower highs signals a possibly weak consolidation phase.
Kole noted, “HTF Bearish MS remains intact. One shouldn’t use a potential LH as invalidation for a swing position unless that LH is confirmed with a LL.”
Also, he wrote that he is patiently waiting for the 95xx sweep to compound while looking to sell 9530 to 9580, a “Clear invalidation above 97/98 (break in MS).”
On the other hand, pseudonymous trader Crypto ISO implied that the market might see a pullback if Bitcoin hit a lower high. For a confirmation of this, BTC needs to break down from $9,500. The trader explained that this would be hard for many people if this is the lower high.
The trader said, “Those that understand MS will get this.”
Then, a pseudonymous trader known as DonAlt stated that for a short-term bearish to confirm, Bitcoin must ideally decline below $9,300. If BTC remains over $9,500, the famous trader suggested a weaker short-term market bias.
He also noted that he might reconsider his short-term bearish bias – mid-term bear bias remains – as it closes above the red line ($9,300). Moreover, if it closes below, DonAlt will consider shorting more aggressively aiming for the green line ($8,500) first and green area second (~$7,000).
Besides the technical and market structures, there are further fundamental factors backing a bullish case for Bitcoin.
An example of this is the hash rate of BTC that remains resilient. As a result, it leaves the mining ecosystem healthy. Also, lower selling pressure from miners, together with dropping exchange inflows, suggests that Bitcoin might see an uptrend soon.
According to Binance Futures, most top traders on the platform stay majority long for BTC. However, more than 50% of traders are short on large-market cap alternative cryptocurrencies such as Ether (ETH) and XRP.
Global Macro Investor’s CEO, Raoul Pal, stated on July 23rd that Bitcoin might soon outperform gold, which has been on a strong rally lately.
He said, “The other bet is that Bitcoin will likely beat gold too. The Bitcoin/gold cross looks powerful but has yet to break out.”
As of now, people are looking forward to whether the short-term bearish market structure would cause a near-term pullback or bullish fundamental factors would offset the risk.
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