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Bitcoin Holds $24K as Top Trader Turn Bullish

With the U.S. dollar strengthening, estimates for the Euro due to inflation in July come in at a dismal 8.9 percent.

Before the Wall Street opening on July 29, Bitcoin (BTC) tried to secure $24,000 as support as recent inflation data raised concerns for the euro.

Trading data reveals that BTC/USD has largely held onto its most recent gains despite spiking to almost $24,500 overnight.

The day’s macroeconomic activity brought bad news for the European Economic Area (EEA), as July’s euro inflation estimates came in at 8.9%, still increasing from June’s 8.6 percent.

According to a report provided by Eurostat, Energy is anticipated to have the highest annual rate of inflation in the euro area in July (39.7% percent, up from 42.0 percent in June), followed by food, alcohol, and tobacco (9.8% percent, up from 8.9 percent in June), non-energy industrial goods (4.5 percent, up from 4.3 percent in June), and services (3.7 percent, up from 3.4 percent in June).

The data revealed an intriguing contrast in some EU member states, where growth exceeded forecasts despite the highest inflation rates in the euro’s history. This gave some commentators the impression that not everything was as it seemed.

The European Quandary nevertheless helped the US dollar, which had been losing ground against a basket of trading partner currencies since its most recent two-decade highs through July.

The U.S. dollar index (DXY) fell as low as 105.54 on the day, its lowest level since July 5, before climbing back up to just above 106 as of this writing.

Additional DXY gains, a crucial inverse correlation for the cryptocurrency markets, could indicate new pressure on the price movement of BTC.

DXY recently fell to the previous high, which is now support, and it appears to be holding. 

In a recent Twitter update, well-known trading account Mikybull Crypto predicted a possible bounce here to 107, 108 before further dropping, adding that this scenario would entail a pullback to $22,800 for BTC/USD.

Arthur Hayes, the former CEO of the derivatives exchange BitMEX, hinted that a weaker dollar was now imminent in a seemingly unexpected bullish turn.

Hayes declared that the Federal Reserve’s return to accommodating monetary policy and more neutral rates had started as a result of the central bank’s most recent key rate increase.

He announced in a letter dated July 28 that Fed Chair Jerome Powell would no longer be increasing hikes, a move he dubbed the “Powell pivot.”

According to the theory, the Fed has limited room for action because rate increases raise the possibility of a deeper economic downturn in the United States.

Top traders on Binance, Huobi, and OKEx have increased their leverage longs despite Bitcoin’s 14% correction from July 20 to July 26. 

To be more precise, the top traders’ long-to-short ratio on Binance was the only exchange to see a slight decline, going from 1.22 to 1.20.

The fact that OKEx traders increased their bullish bets from 0.66 to 1.17 in just six days more than offset this impact. 

It is bullish to interpret the lack of panic selling after Bitcoin failed to break the $24,000 support on July 20.

Even though Bitcoin fell below $21,000 on July 26, derivatives data shows no signs of stress from professional traders. 

These seasoned whales, as opposed to retail traders, are aware of when to stick with their convictions, and the strong derivatives data clearly demonstrated this attitude.

According to the data, traders who anticipate a significant market correction should Bitcoin fail to overcome the $24,000 resistance will likely be dissatisfied.

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Author

  • Zahari Rangelov

    Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.

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