After being in the red for more than a month, bitcoin (CRYPTO: BTC), the largest digital currency by market capitalization, has pared some of its losses and is trading up nearly 12% over the past week. A brief high of $22,527 is forming. With a bounce in volume on July 8, before returning to the level of around $21,700.
Experts caution the unexpected price increase as a “one-off event”, which is a reaction to crypto exchange Binance’s decision to eliminate fees on BTC spot trading and does not in any way indicate a price reversal.
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There is no solid reason for the rise in prices
Andy Lian, chief digital advisor at the Mongolian Productivity Organization, said that the sudden jump in BTC price is not sustainable as there are no good reasons for it.
“The only piece of good news closely tied to the bounce will be Binance’s zero fees bitcoin hype, There were many who were trying to achieve VIP status, which resulted in massive transactions. That volume could be subject to wash trading and manipulation,” he says, adding that the phenomenon is one-sided.
He says investors should “not be fooled” into thinking that the market has turned rapidly.
Liquidation of leveraged short positions
Even as the price of BTC increased despite the lack of any significant announcements, Glassnode’s futures short liquidation metrics revealed a significant number of leveraged short positions liquidated – between 6 and 7 July at $ 10.23 million to $29.42 million, which could put a bullish pressure. For BTC to move above the $22,500 level.
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BTC price may fall
Raj Kapoor, Founder and CEO, India Blockchain Alliance, says that given the crypto’s history of volatility, this bullishness is by no means a long-term reversal and that the price of BTC is likely to decline.
“The uptick accelerated when Binance offered zero-fee trading for bitcoin, with plans to eliminate fees for more tokens in the future. This was followed by a stock market rally after the Federal Reserve issued minutes. I.”
Experts say that the crypto market has not yet bottomed due to the intermittent talks of recession, the breakdown of many crypto deals, rising inflation, geopolitical crisis and fears of rising interest rates, which will continue to cause additional short-term volatility. keeps. In crypto and stock markets.
high money outflow
Exchange outflows increased from 20,495 BTC to 18,648 exchange inflows on 3 July, while exchange outflows stood at 50,966 BTC against 43,601 BTC on 7 July, resulting in higher buying pressure.
Notably, the majority of this volume has come from the retail segment.
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economic downturn price
EarthID vice president of research and strategy Sarat Chandra said BTC has begun to exhibit decisive price action as investors price in the coming data about the economic slowdown.
“Lack of liquidity coupled with low trading volume accounts for bitcoin’s intraday activity. Bitcoin prices will remain volatile based on upcoming data about an impending recession,” says Chandra.
BTC bounce with higher volume raises optimism
Jenny Zheng, NFT Business Development Lead, Bybit says that the hourly chart of BTC gives an optimistic outlook and the 4-hours chart suggests a double bottom formation, indicating further price bullishness.
“The volume was only on Binance. This may be due to the removal of bitcoin spot trading fees on its anniversary. But such actions have certainly led to more buying for bitcoins on other exchanges as well. This is happening in different communities. reflected in who I am,” says Zheng.