Let’s talk about the recent supply, demand and market conditions of Bitcoin. Below is an analysis of the situation regarding miners, the German government, ETFs and futures.
The miners surrendered and we're now in a bear market? the answer is negative.
The market was bearish until the hash rate rose (thin yellow line in the chart). Miners are selling and this happens after every halving as well. When the thin yellow line resumes its upward trend, it is basically a good buying opportunity.
Source: Foresight News
The main factor in this market panic is that the German government continues to sell seized Bitcoins.
The movie2k gang (suspects) have been holding Bitcoin since 2013, and its value has increased more than 100 times to about $3 billion.
The German government is now in charge of these assets and is ready to sell them immediately.
One of the best comments I saw was: "This is bullish, when was the last time Germany made a good decision?"
Without further ado, let’s get back to the topic.
They have sold more than 10,000 Bitcoins (Editor's note: the post was published on July 9), and it seems that the selling method was market selling, which further depressed the price of Bitcoin, and at the same time, it also made them Assets held by oneself depreciate in value.
Rumor has it that they have now moved to OTC trading desks and let the professionals handle it.
This would reduce the severity of the price impact, but would not eliminate it entirely. The OTC trading platform will go to the market to fill the order matching gaps between buyers and sellers.
Source: Foresight News
Let’s review the situation in Mentougou again.
It appears that 2,700 Bitcoins were recently distributed to users, with 139,000 remaining. This number is indeed quite large. I will observe how many of these people choose to sell the recovered Bitcoin.
Source: Foresight News
What about those market players who buy and sell ETFs?
To my surprise, money is flowing in steadily and ETF data shows players are buying the dip. It's too early to draw conclusions, but there are already hints that the market is in "dip hunting" mode.
Source: Foresight News
Notice that Bitcoin price trades sideways in a compressed range of low volatility while Bitcoin leaves exchanges – this is bargain hunting.
What about the total capital flowing into Bitcoin?
Source: Foresight News
It has fallen into a common reversal zone.
What about the futures market?
The heat map below shows the position of market leverage liquidation. If the price wants to climb up, all shorts will be cleared until $77,000, but there is also a large liquidation point at $47,000, which is the next stop for the market to turn bearish.
The question is, which way will the prevailing winds skew?
Source: Foresight News
This is another perspective of the futures market. There is still too much speculative money, and it is difficult for prices to rise in this case.
There are too many “paper Bitcoin” bets. We haven't reached that to the moon moment yet.
Source: Foresight News
Let’s look at another chart to understand.
Paper Bitcoin stakes have been rising, with 140,000 additional Bitcoins being added out of thin air, but the spot supply remains unchanged. Now compare that to the 10,000+ Bitcoins sold in Germany and you can see what caused the market to really plummet.
Source: Foresight News
The risk signals in the chart below suggest that the market is not entering a bear market. In addition, the U.S. stock market hit new highs, and traditional financial markets still favor a bull market.
The current consolidation period will be an opportunity for investors who are hoarding Bitcoin.
Source: Foresight News
The market is in a period of deep consolidation, which is meant to scare traders to the core and push the pain of liquidation to the limit.
A break below the $47,000 mark could still derail the bulls, but for now it looks like the market’s dip has begun.
let us wait and see. If you are using leverage, I would wait for the hash rate to rebound.
Remember: use spot market margin, not futures.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reprinted with permission from: Foresight News
Original author: Willy Woo
