- Crypto analysts believe that Bitcoin has already formed a local bottom, however, BTC continues to struggle to move past its 200 EMA.
- We are already into 30-day Bitcoin miner capitulations and some signs are emerging that it could be ending soon.
In the last 24 hours, the cryptocurrency market has shown a strong reversal. Earlier today, the BTC price jumped as high as 8 percent moving past $22,000. However, Bitcoin has retraced partially and is currently trading 5.5 percent up at a price of $21,667.
The altcoin space also joined the party with Ethereum (ETH) jumping 7 percent moving past $1,200 levels. On the weekly chart, both Bitcoin (BTC) and Ethereum (ETH) have registered double-digit gains.
The rest of the altcoin sector also seems to be following suit. Popular altcoins like Solana (SOL), Polkadot (DOT), Polygon (MATIC), and Cardano (ADA) are all up 4-5 percent.
Well, the recent price pump in the Bitcoin price could be due to a strong pullback in the U.S. stock indices over the last trading week. Bitcoin (BTC) shares a very close relation to the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) which is up more than 5 percent this week.
Bitcoin local bottom
Some crypto market analysts believe that Bitcoin has already formed a local bottom. This means that prices could pump up in the short term. Dan Held, who handles growth at Kraken said that the “mass contagion” in the crypto space seems contained by FTX. He further mentions a few other points which might act as a catalyst for Bitcoin and the broader crypto space.
Was that the bottom for Bitcoin?
– Mass contagion feels contained w/ FTX
– Celsius paying off their BTC loan
– Bankruptcies already filed
– Inflation fears cooling off
— Dan Held (@danheld) July 7, 2022
However, both Bitcoin and Ethereum have been facing rejections at their 200-day moving averages. Cubic Analyst Caleb Franzen wrote:
Another important retest for $ETHBTC, this time on the 200 day moving average cloud (EMA & SMA). This teal range was former support, now acting as potential resistance. If we can break above this range, it might be a key risk-on signal.
However, as long as BTC remains under its 200 EMA, one cannot predict any sustained price reversal going ahead. Thus, there’s always a possibility of Bitcoin correcting further.
— Lark Davis (@TheCryptoLark) July 8, 2022
Bitcoin miner capitulation
Another area to watch is the miner capitulation. Bitcoin miners have been selling heavily over the last month. As the BTC price corrected 33% in June, miners had to liquidate a huge portion of their Bitcoin holdings in order to cover operation costs. Speaking to Decrypt, Blockware analyst Joe Burnett said:
We’re 30 days into a miner capitulation (according to hash ribbon metric), and there are signs that it is potentially ending soon if the price doesn’t fall further. Miner capitulations add to short term sell pressure as miners liquidate their BTC treasuries to continue their operations.
Does it mean that the miner capitulation is over at this stage? Well, nothing much can be said as of now. Few big Bitcoin mining giants like Marathon Digital continue to hold their BTC and haven’t sold any BTC since October 2022. As of June 30, Marathon holds 10,055 BTC. However, Marathon said that they might consider selling part of their holdings to raise funds as they continue to expand their mining operations.