Coinbase Analysts Warn: Bitcoin’s Upward Trend Could Hit a Wall — Here’s Why

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As a seasoned researcher with extensive experience in the cryptocurrency market, I’ve witnessed numerous price fluctuations and trends over the years. The recent surge in Bitcoin’s value, reaching over $66,000, is an exciting development that has caught the attention of traders worldwide. However, based on my analysis of the Coinbase report and legendary crypto trader Peter Brandt’s insights, I believe we could be facing a potential roadblock for Bitcoin in the short term.

Bitcoin has seen a significant price surge of over 12.6% within the past week, reaching above $66,000. However, analysts at Coinbase have raised concerns in their recent report, indicating potential obstacles to Bitcoin’s continued upward trend due to a growing number of sell orders on their exchange.

The report indicates that Bitcoin’s rising value has attracted numerous traders looking to profit through sales, potentially limiting its future price increase.

A Wall Ahead, What Happens To Bitcoin Then?

In this report, produced by Coinbase researchers David Duong and David Han, we delve into the current market landscape. Notably, they observed an uptick in sell orders on Coinbase, which were placed within the 5-10% range of the mid-price. This pattern suggests a significant demand to prevent further price increases for the digital currency.

It’s possible that traders are taking profits and adjusting their positions based on present market circumstances, potentially leading to a decrease in temperatures compared to recent peaks.

According to Duong and Han:

At present, traders might be cashing in on their gains or selling more aggressively as the prices rise, potentially placing a cap on further upward momentum.

Activities indicating market sentiment play a crucial role in determining Bitcoin’s short-term worth. According to Duong and Han’s research, these factors significantly influence Bitcoin’s value. Additionally, they draw attention to information from Arkham Intelligence, which reveals external elements contributing to downward pressure on the cryptocurrency market.

A noteworthy element is the continuous transfer of approximately 50,000 Bitcoin from Mt. Gox to exchanges since July 5. However, it’s important to note that the trustee in charge of Mt. Gox still maintains a substantial Bitcoin hoard. Consequently, this situation casts doubt and may introduce sell pressure to the market.

Although the selling demand has risen, there are certain favorable elements that could balance out this trend. One significant factor relates to the political climate in the United States.

As a researcher observing global financial markets in July, I noticed a substantial change in U.S. political dynamics that led to a notable depreciation of the U.S. dollar. The DXY index, which measures the greenback against a basket of major currencies, experienced a decline exceeding 2%.

Because the price of Bitcoin is mainly determined in US dollars, a decreasing dollar value results in a more valuable Bitcoin in terms of other currencies. This Bitcoin appreciation can help mitigate some of the selling pressure caused by an influx of sell orders.

Further Roadblock On The Horizon

In addition to the warning given by the Coinbase analysis indicating a potential Bitcoin correction, renowned cryptocurrency trader Peter Brandt has expressed apprehension regarding the digital asset.

Brandt shares his observation that although Bitcoin’s advance to this point has left him “impressed,” the cryptocurrency’s price trend continues to exhibit a pattern of decreasing peak and trough values. This pattern persists even in the face of significant events such as the halving and the introduction of the Bitcoin ETF, as well as the heightened publicity surrounding Bitcoin.

Coinbase Analysts Warn: Bitcoin’s Upward Trend Could Hit a Wall — Here’s Why

The Bitcoin chart reveals a concerning pattern, as the asset’s price has failed to exceed previous highs and has instead reached new lows within its current range.

Bitcoin trades for $66,447, a 3.9% rise from its previous lows of $63,229 in the past 24 hours.

Coinbase Analysts Warn: Bitcoin’s Upward Trend Could Hit a Wall — Here’s Why

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2024-07-20 01:16