LIQUIDITY BASED SENTIMENT FOR SUB $60K BITCOIN IS EVAPORATING

Bitcoin Price Surge: Causes, Potential Peaks, and Downside Targets

Bitcoin's price is on the rise. Let's explore what’s driving the increase, how high it could go, and the possible downside targets if it drops.

What is Causing Bitcoin’s Price to Rise?

Several factors are contributing to the current BTC price action. Last week's economic reports and comments from the Federal Reserve were mixed but leaned bullish. Additionally, spot BTC ETF flows were positive for five consecutive days, with Grayscale showing varied activity: flat on Monday, selling $51M on Tuesday, and buying on Wednesday through Friday. Notably, Grayscale’s CEO Michael Sonnenshein announced his resignation today, which might impact market sentiment.

Bitcoin also closed with a green weekly candle, triggering a new long signal on the Trend Precognition A2+ algorithm on the weekly timeframe. While this signal is tentative until the current candle closes, it has gained strength overnight. A move below $61k would invalidate this signal for me. The order book activity shows mixed signals, with bid liquidity blocks between $50k and $61k being pulled or moved. This could indicate either fading support or a setup for aggressive buying.

How High Can Bitcoin Go?

There is significant liquidity-based resistance between the current price and the all-time high (ATH). Although much of this resistance has moved into the active trading range over the past two months, it will require substantial near-range bid liquidity to break through. I am currently focusing on two near-range targets. The $69k level remains critical for a confirmed resistance/support (R/S) flip, as it has not sustained more than two consecutive candles above it on failed retests. Full candles above $69k, with possible consolidation, would indicate a strong push towards a new ATH.

A measured move from the breakout of the falling wedge suggests a target around $73k. If we reach this level, expect FOMO (fear of missing out) to kick in. I will monitor the order book to see if enough bid liquidity supports a breakout and check the order flow in FireCharts Binned CVD to see if significant traders are buying or selling in that range.

What are the Potential Downside Targets?

Prior consolidation ranges remain viable technical targets, though the bid liquidity in those areas has either moved up or evaporated, indicating little current sentiment for those levels. The disappearance of bid liquidity blocks at $60k is concerning, as there is no evidence they have been moved. There are some bids laddered between $60k and $65k, but not as heavily stacked as before.

News as a Catalyst

The long-term outlook for Bitcoin remains bullish, but downside volatility is always possible, even in bull runs. This week’s news could be a significant catalyst:

Grayscale CEO Change: Grayscale announced the resignation of CEO Michael Sonnenshein, with a new CEO starting on August 15th. Speculation is already suggesting a potential drop in GBTC ETF fees, which is bullish.

Crypto Regulatory Legislation: The US House of Representatives is considering a bill named FIT21, which aims to create a regulatory framework for crypto split between the SEC and the CFTC. Passing this bill in the House would likely generate bullish momentum, though it would still need to clear the Senate and the President.

ETH ETF Delays: The SEC postponed voting on a spot ETH ETF, likely due to the upcoming FIT21 bill. The jurisdiction over ETH could be debated between the SEC and the CFTC. The market is speculating on eventual approval, setting up a potential "buy the rumor, sell the news" scenario.

With all these developments, it promises to be an exciting week for trading.

Have a great day! 😎

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Opinions Only. No Financial Advice.

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