Why is the price of Bitcoin stuck?
Bitcoin (BTC) price has been hovering between $55,000 and $58,200 for a week as the 200-day EMA remains stubborn resistance at $58,000.
Data from Cointelegraph Markets Pro and TradingView showed Bitcoin price trading at $57,841, up 0.36% amid low trading volumes, indicating an extended period of consolidation.
Let's take a look at the reasons why the price of BTC is stuck today.
The price of Bitcoin has fallen below the 200-day EMA
On July 4, Bitcoin price fell below critical support at the 200-day exponential moving average (EMA), fueled by the German government's continued BTC selling and Mt. Gox fees.
Several attempts have been made to retrace that level, but each has failed to create a broader price trend.
Instead, BTC will “cut” below this “key SR area” for seven days, according to independent trader and analyst Jelle.
“Bitcoin is moving well on its roadmap,” fellow analyst Dan CryptoTrades told XPost on July 11.
Based on recent price action, Bitcoin has recovered to $56,500, a key level to avoid the “risk of further rapid decline”.
Daan Crypto Trades said,
“Fighting the Big Battle Now with Daily 200MA/EMA and Range Low.”
A drop below the 200-day EMA has seen Bitcoin Whales buying below this level with demand liquidity, according to FireCharts shared by Tresource Material Indicators.
As material indicators, a critical candlestick above this level indicates strength among buyers.
“I would like to see BTC Bulls push the 200-day MA and 21-day MA with a single daily candle to show a sign of strength. Not doing so would be a sign of weakness.”
Bitcoin whales continue to accumulate.
Bitcoin whales seem undeterred by the recent drop, seeing it as an opportunity to add to their holdings. Glassnode data shared by independent trader Ali Martinez shows the Bitcoin Accumulation Trend Score at 0.444, which suggests that investors are increasing.
The Accumulation Trend Score is an indicator that reflects the relative amount of entities actively accumulating coins on-chain relative to BTC holdings.
A positive score indicates that whales are hoarding more bitcoins than they are distributing, while a negative score indicates the opposite.
According to Glassnode, an increase in the trend score indicates a shift from circulation to accumulation by almost all of the same crowd. This shift mirrors the same pattern of accumulation seen in October 2023, before Bitcoin's massive price increase from $25,000 to $49,000 was triggered by the launch of spot Bitcoin ETFs.
This stock is supported by CryptoQuant data, which shows that entry into stock addresses on June 10 shows Bitcoin's dip below $54,000.
This BTC accumulation, especially by large investors, shows a reluctance to liquidate their holdings, thus reducing market volatility.
Bitcoin price volatility is still non-existent.
From a historical point of view, the volatility of Bitcoin remains at the lowest level.
The cryptocurrency shows a net slowdown in trading activity since April, as profit-takers hope for a more significant crash.
Data from TradingView shows the Bitcoin Historical Volatility Index in 2016. As of July 11, it shows at 8.86, which is below the 2021 high of 42.7.
All these factors paint a current picture of the Bitcoin market where the price seems to be stuck in a narrow range.
However, changes always occur quickly, so market participants must closely monitor on-chain metrics for information.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
