BTC price analysis, week May 28 to July 4, 2021

A bullish week with an 8% increase produced by the momentum that the price had on Monday morning and Wednesday afternoon but in general we continue with the laterality of the price in the that we have met since May 20.

If we observe this week within the set of recent months, it is seen that we are still within the channel that goes from $ 30,000 to $ 40,000, making it clear that the price of bitcoin follows its own rules, when most investors expected increases and falls associated with the period after the halving, the price has stagnated and has stabilized for a month and a half. The general sentiment is that we will exit this channel breaking it above but for the moment the price of BTC remains week by week within it. 

Flow on exchanges

Behind this price stabilization is the supply and demand for BTC and if we look at the graph of the flow of bitcoin on exchanges it shows that it remains stable; High negative values ​​indicate that BTC is being taken out of the wallets, which usually implies a price increase and, on the contrary, high values ​​on the graph indicate a price decrease.

If we focus on the data of the last 7 days, it shows that about 2,500 BTC have been taken from the exchanges, this fall is due to the withdrawals that have been in Binance and Huobi that have had negative news that we will comment on later.

As usual, the media delight us with both positive and negative news, which causes them to be compensated and neutralized and lead investors to have neither positive nor negative feelings, which cause price stability. 

The markets work as if they were a popularity contest, if investors think that the asset is undervalued they buy it, if on the contrary they think that the asset is overvalued they sell it. 

News of the week

We have that Binance and Huobi are being penalized for not having the corresponding licenses to operate.

  • The UK regulator bans Binance derivatives trading in the UK.
  • Canada prohibits trading Binance derivatives. 
  • The Thai SEC and the Cayman Islands Regulatory Authority take action against Binance. 
  • Huobi, a large offshore exchange, announced that users from mainland China, Taiwan, Israel, Iraq, Bangladesh, Bolivia, Ecuador, Kyrgyzstan, Ukraine and the United Kingdom are now prohibited from using its derivatives trading center
  • Paraguay presents a bill of BTC.
  • Morgan Stanley owns 28,000 GBTC shares valued at about $ 800,000

ThePuell Multiple Indicator

This metric created by David Puell (@kenoshaking) is calculated by dividing the daily issue value of bitcoins in dollars by the 365-day moving average of the value of daily broadcast.

Which reflects the current price of BTC with respect to the average of the last year from a mining point of view and indicates the current profitability of the latter.

  • If the value is high there is an incentive for the miners to sell.
  • If the value is low it causes some miners to shut down their machines because they are not profitable.

This indicator has been very good at identifying buy zones and just this week we have entered the green zone that historically teaches us that the price is at a minimum.

A caveat must be made because this time the drop in this indicator is directly related to the mining ban in some areas of China, which has led to a drop of the historical hashrate and not with a “natural” fact of the market.

The difficulty adjustment is carried out every 2 weeks, so this steep drop in the hashrate has meant that until the difficulty has been readjusted with the new hashrate, the blocks have been delayed on average more than 10 minutes, which is a day. fewer have been issued, in each block the miner who generated it is rewarded with 6.25 BTC and as there are fewer blocks per day there are less profits and the Puell Multiple index goes down. Summing up this drop in hashrate, it is not because there are miners who have turned off their machines because it is not profitable for them to mine, but because they are transferring them from China to the United States, Kazakhstan …

The migration of Chinese mining hardware to other countries will entail added expenses for these In addition, miners will stop entering because they do not have the machines in operation, which will lead them to sell some BTC that they have accumulated to meet these extra expenses. 

On the other hand, we will have the rest of the miners who will have more profits because the competition in mining will decrease as there are fewer machines in the Bitcoin network.

Bitcoin distribution

This week the whales return to BTC purchases, they have increased by 8, now there are 2065 and on the contrary the sharks have decreased by 25 which It is a large number and in 2 humpbacks there may have been a transfer of bitcoin from 2 exchange addresses to several smaller whales.  

In the rest of the groups there is little movement.

How the future

looks like The position of the hodlers, holders of bitcoin for more than 5 months, has changed since June 13, where they have gone from selling to accumulating, as a general rule, hodlers tend to anticipate the market and the fact The fact that they have started buying is a medium-term indicator that the price is going to rise.

Analysis of the price of BTC in the week of May 28 to July 4, 2021

As we mentioned before, we will have Chinese miners who are moving with more expenses and less income, so they predictably sell bitcoin and the rest of the miners obtaining more profits thanks to the fact that part of the competition is temporarily disconnected from the network.

Categories: Bitcoin, BTC, Coins, Distribution, Hodl, Trader, Trading

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