Most 'fear' in 3 months as $26.4K becomes key — 5 things to know in Bitcoin this week

Bitcoin (BTC) emerges from a hectic macro week to circle some classic trend lines near $26,000 — what could happen next?

After some brutal tests of traders' resolve over the past seven days, BTC price is still determined to hold familiar ground.

Market participants are in "wait and see" mode as a lack of clear direction characterizes the largest cryptocurrency at the start of a new week's trading.

United States holidays mean that traditional markets will only open on June 20, giving at least one day's grace before any surprises hit.

There are still plenty left to deal with from last week, however — including BlackRock filing for a Bitcoin spot exchange-traded fund (ETF). Rumors are now that Fidelity Investments might follow.

What will it take to inspire BTC price to adopt a trend? Cointelegraph takes a look at some of the major topics now under discussion among traders and analysts.

No relief for nervous Bitcoin traders

The latest weekly close for BTC/USD yielded little change over the past seven days.

At just above $26,000, “sideways” is the name of the game for the pair, which weathered a slew of potential volatility triggers over the week.

A trip to new three-month lows was short lived, however, and traders are now cautiously waiting for new cues on direction while not yet defaulting to a bearish view.

“I remain long while we show no signs of a reversal,” Crypto Tony said in a summary of his position on the day.

“Looking for that trend line test at $26,900, and following a flip of that we then have $27,300 to note then up and away. Step by step we move.”

Fellow trader Koala argued that upside and downside extremes centered on a $4,000-wide corridor, with lows likely to get swept first before a return to $27,000.

“A set of equal highs and equal lows. I think we run the equal lows before the equal highs,” he argued.

“The demand area is where I'm interested in bidding for a run higher (invalidation is quite obvious) If demand holds, then 27k+. Otherwise, 23kish.”

For Credible Crypto, the potential range was narrower, with $25,500 the lower boundary.

“It would not surprise me to see us chop around between the RED and GREEN regions below for another few weeks. Any move above 28.5k and we will have broken a key market structure level that would imply that our corrective structure has completed and we may have begun a new impulsive move,” he wrote in part of recent analysis alongside an explanatory chart.

“A low timeframe move below GREEN is OK, because (as per previous posts), my HTF bias is bullish above 20k. That being said, I would only expect us to dip below GREEN due to some short term, fundamental/event driven volatility. Let's see what the next few weeks bring.”

Trader Pierre flagged two trend lines in the form of the 4-hour and 1-day as support and resistance levels, respectively.

Very elaborate analysis shared yesterday:
- Must hold = H4 trend
- Must break = D1 downtrend (same since +29.0k)
- Chopfest in between https://t.co/pIAFeLgFQ2 pic.twitter.com/h9lhnjKImH

— Pierre - I will never DM you first (@pierre_crypt0) June 19, 2023

BTC price additionally circled the classic 200-week moving average (MA) to start the week, this lying at $26,600, per data from Cointelegraph Markets Pro and TradingView.

Speculators in the spotlight

In terms of where BTC price might fall to should downside momentum return, on-chain analysis offers a clearer vision of support.

For analytics firm Glassnode, recent price action has centered on a key breakeven point for Bitcoin’s more speculative investor cohort.

Dubbed “short-term holders (STHs),” these correspond to wallet entities, which have hodled coins for 155 days or less.

The aggregate cost basis (CB) for these entities — the price at which they purchased coins within that 155-day window — currently sits at $26,400, roughly matching the 200-week MA.

“The recent volatility in Bitcoin price action has been anchored around the Short-Term Holder Cost-Basis of $26.4K,” Glassnode argued in a Twitter post at the weekend.

“This suggests the STH-CB remains a pivotal level in determining both the direction and momentum of the local trend.”

Below $26,400, then, STHs begin to encounter unrealized losses on their investment, as shown by an accompanying chart.

Glassnode has previously flagged the significance of the STH-CB, this along with the equivalent for 155-day+ investors, known as long-term holders (LTHs), becoming a source of interest in particular after that November 2022 meltdown of exchange FTX.

Macro cools after intense week

With United States markets closed for the Martin Luther King Jr. holiday on June 19, macro catalysts for crypto markets lie in wait later in the week.

While not as numerous or significant as the previous week’s set, these still have the potential to spark some surprise volatility.

The Federal Reserve is among them, with Chair Jerome Powell due to testify before Congress over two days from June 21.

After the Fed’s recent decision to pause interest rate hikes but leave the door open to resume them later, markets will be keenly analyzing Powell’s language for hints as to what might come next.

To cap off the week, June 22 will see the release of Purchasing Managers’ Index (PMI) data.

Among market participants, meanwhile, the focus is equally on Bitcoin’s correlation to traditional risk assets as it is on how macro triggers impact them.

“Not only has $BTC lost the positive correlation w/SPX and NDX, but we've also lost the inverse corr w/DXY,” trader Josh Olszewicz noted last week, reference Bitcoin’s interaction with the S&P 500, Nasdaq and U.S. dollar index, respectively.

Credible Crypto suggested that the recent disparity between BTC and SPX performance — sideways versus what various source have called a “bull market rally” — may yet resolve in bulls’ favor.

Been seeing quite a few comments lately on the "weakness" of $BTC vs trad markets $SPX and how this is bad for crypto.

Don't mistake consolidation for weakness.

Like a student who gets a good nights sleep before a major exam- the more we rest before the big day the better we… pic.twitter.com/FoCrvOskD1

— CrediBULL Crypto (@CredibleCrypto) June 18, 2023

Cointelegraph has often reported on the ups and downs of Bitcoin’s macro correlations in recent years. A notable theme post-2020 has been strength during periods of Fed liquidity injections and vice versa.

GBTC gets a BlackRock boost

Bitcoin itself may be offering little inspiration, but one of its biggest investment vehicles is experiencing a resurgence in its own right.

The Grayscale Bitcoin Trust (GBTC) has begun a fresh attempt at narrowing its heavy discount versus the BTC spot price.

GBTC has traded at this discount — which is in fact a negative premium — since Bitcoin’s all-time highs in 2021. Since then, it has reached -50%.

Last week’s announcement of a Bitcoin spot price exchange-traded fund (ETF) filing by BlackRock appeared to induce a change of mood, and as of June 17, the premium had decreased to -36.6%.

As Cointelegraph reported, the changes came despite arguments over the true status of BlackRock’s offering, with some claiming that it would not be a spot ETF, which remain banned in the U.S., at all.

That aside, GBTC’s recent performance remains impressive — 36.6% is within striking distance of new 2023 highs for the premium.

Buyers have also been making themselves known, leaving major client ARK Invest to react. ARK currently owns more than 5.3 million GBTC shares.

This week, meanwhile, fresh speculation of an ETF offering focuses on asset manager Fidelity Investments, with details still forthcoming.

“I was long GBTC before this but this makes me more confident that it was the correct move,” investor Mike Alfred reacted.

Market optimism sees repeated tests 

Crypto market sentiment got spooked last week thanks to the combined ramifications of U.S. legal action against exchanges and macroeconomic policy changes.

Related: Bitcoin bulls look to re-establish control — Will BNB, LTC, OKB and QNT follow?

A look at the Crypto Fear & Greed Index shows how recent events have left their mark — June 15 saw the lowest score since mid-March.

While this suggests a more “fearful” environment than at any time since then, Fear & Greed nonetheless remains surprisingly stable. Those lows came in at 41/100 — barely “fearful” at all and subsequently returning to the stable “neutral” range.

As of June 19, the Index measures 47/100.

Continuing, research firm Santiment additionally cited the BlackRock ETF story as potential fuel for markets — specifically because some reactions were hostile.

For Santiment, “the more negativity surrounding this story, the stronger likelihood of a continued rise” in crypto markets, it explained last week.

Magazine: Gary Gensler’s job at risk, BlackRock’s first spot Bitcoin ETF and other news: Hodler’s Digest, June 11–17

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.