Why is it so difficult for Bitcoin to reach a new high?

Author: 1912212.eth, Foresight News

Last night at 9 PM, BTC briefly broke through $70,000 but was quickly hit hard, with a 4-hour decline of 2.12%, ultimately stabilizing around $67,000. After a few hours of consolidation, BTC faced another wave of decline around 6 AM this morning, hitting a low of $65,862, and after stabilizing, it hovered around $67,000.

Affected by BTC's performance, ETH also fell from above $3,500 to a low of $3,087, currently recovering to around $3,300. Altcoins generally performed poorly. In the past 24 hours, the total liquidation across the network reached $168 million, with long positions liquidating $144 million.

This month, after the negative news of Germany selling BTC was digested, the market dramatically began to rise due to Trump's assassination and the U.S. elections. From mid-month's $58,000, it rose to around $68,000, and after Trump announced various favorable views on Bitcoin for the elections, the market briefly retreated. However, it wasn't long before the interest rate market generally estimated that the Federal Reserve would cut rates for the first time this year in September, with continuous net inflows into BTC spot ETF data. Under a series of favorable news influences, BTC began to surge again. Just as BTC broke through $70,000, nearing the historical high of $73,777 set in March, the market was once again thwarted, leading to a downward trend. Why is it so difficult for BTC prices to reach new highs?

The total BTC contract positions across the network hit a new high, often indicating a short-term peak for BTC

On July 29 at 6 PM, according to Coinglass data, the total Bitcoin contract positions across the network reached $39.46 billion, setting a historical high. Just 3 hours later, after BTC broke through $70,000, it began to decline sharply.

Contract data to some extent represents the market's view on future trends. When contract data hits a historical high, it indicates that the market is overly optimistic about BTC's short-term performance and is continuously leveraging, which often leads to a correction to clear positions and move forward with a lighter load.

On March 4, March 13, March 29, and June 7, BTC contract data all reached daily peaks on those days. If we compare these with BTC prices on those days, it is evident that they occurred at price peaks.

Ethereum spot ETF net inflows are overshadowed by Grayscale outflows

Looking back at the BTC spot ETF approval, BTC prices also experienced a period of decline. The same history occurred with Ethereum. Just when the market thought its inflow data would perform poorly due to the lack of staking rewards, it attracted $1.183 billion in the first week of its launch.

However, Grayscale Ethereum Trust (ETHE) saw outflows of $1.513 billion, which directly led to a total net outflow of $338 million for its Ethereum spot ETF after accounting for that data.

ETH prices also rose from $2,800 to $3,562, then slightly retreated to around $3,300.

Mt.Gox compensation has begun, large selling pressure raises market concerns

On July 24, Mt.Gox transferred 61,558.9 BTC (approximately $3.894 billion) to a trading platform for compensation distribution. Of the 51,342.8 BTC (approximately $3.218 billion) entering Bitbank, SBI VC Trade, and Kraken, compensation distribution to creditors has been completed.

Later that day, Bitstamp also began distributing 10,200 BTC to Mt.Gox creditors, approximately $676 million. The next day, users claimed to have received their compensation.

Most users who were passively locked up received fewer coins, but due to the continuous surge in BTC prices over the past decade, after suddenly receiving such a large compensation, a considerable portion of users will likely choose to sell for profit.

This morning, a Mt.Gox address transferred 0.02 BTC to a newly created address, possibly for transfer testing, and will continue with compensation actions. It can be anticipated that until the compensation is completely finished, the market will still be under the negative shadow of its large selling pressure.

U.S. Justice Department's large transfer raises custody or sale suspicions

On July 28, Trump stated during the Bitcoin 2024 conference that if elected president, the U.S. would not sell (100% retain) any Bitcoin and would keep it as a strategic Bitcoin reserve. The BTC Trump referred to includes tens of thousands of BTC confiscated by the government during the Silk Road operation.

Recently, blockchain data from Arkham Intelligence showed that a wallet marked as the U.S. government: Silk Road Justice Department transferred 29,800 BTC to a new address. Subsequently, that address forwarded 19,800 BTC and 10,000 BTC to two different addresses.

Arkham analysts predict that one transfer of 10,000 BTC worth $670 million is a deposit to an institutional custodian or service agency. Bloomberg senior ETF analyst James Seyffart speculated that this transfer might be a wallet reorganization for the custody of confiscated Bitcoins.

So far, opinions among market participants are divided on whether these deposited BTC are being held or sold, but the negative impact on the market continues to be felt.

Future market trends

QCP Capital: The market needs a larger catalyst for a significant breakthrough

QCP Capital stated in an official post that although Bitcoin prices fluctuated during Trump's speech at the Bitcoin conference, the market did not experience the expected volatility. Bitcoin prices remained between $67,000 and $70,000, with significantly reduced volatility.

Trump's speech echoed industry expectations, but the market may need a larger catalyst for a significant breakthrough. This catalyst may emerge as the U.S. elections approach, when promises and policies become clearer. Despite Trump's optimistic remarks, Bitcoin has failed to break its historical high, so it may continue to trade within a range.

GSR Co-CEO: Altcoins will make a comeback and return strongly

Rich Rosenblum, Co-CEO and co-founder of crypto market maker GSR, stated on social media that every time Bitcoin rises, the altcoin angel on my shoulder shouts: "Altcoin season is here." The altcoin devil sarcastically responds: "Not this time…" Altcoins cannot rise in this regulatory environment. The angel replies: "The teams and technology are much better now; altcoins will find a way to break through." This is the first time the altcoin devil has remained silent.

Bitcoin's market dominance has been rising this month, and BTC may continue to lead the next phase of the bull market (or more accurately, SOL, the fastest horse). But this is the time I am most confident that altcoins will make a comeback and return strongly.

Real Vision Founder: Bitcoin is about to break through a massive cup-and-handle pattern and enter the banana range

Raoul Pal, former Goldman Sachs executive and founder of macro research firm Real Vision, stated on social media, "Bitcoin is about to break through a massive cup-and-handle pattern and enter the banana range."

Raoul Pal previously mentioned that the "banana range" is a concept frequently discussed by Arthur Hayes. It is a highly cyclical phase when liquidity enters the market, and central banks need to refinance all debts, sweetening the deal for the people. At this time, cryptocurrencies usually surge vertically. This is driven by macroeconomic forces in the debt refinancing cycle, affecting all asset prices, but cryptocurrencies tend to perform particularly well. So the simplest approach is not to mess it up. Maintain a core portfolio with most assets allocated to major cryptocurrencies. If you can get it right with other assets, you can make a lot of money in that 10-20% of the portfolio, which carries higher risk but also greater returns.

BRN Chief Analyst: Bitcoin will see a strong rise to new highs

Valentin Fournier, chief analyst at digital asset research firm BRN, stated that besides accumulating mining rewards, mining companies seem to be directly purchasing Bitcoin from the market to increase reserves. They triggered the Hash Ribbon signal, a long-term bullish indicator that shows the end of miner capitulation and an increase in processing power used for Bitcoin mining.

Fournier noted that miners' recent behavior indicates they are confident in Bitcoin's long-term value. Given this accumulation behavior, Fournier added that traders are likely to continue investing in this top cryptocurrency, citing a series of strong catalysts. The lower PCE data released on Friday, Trump's speech at the 2024 Bitcoin conference, and the easing of selling pressure from Mt. Gox and Grayscale ETF all suggest that Bitcoin will see a strong rise to new highs.

10x Research: The Fed's interest rate decision on August 1 and the CPI report on August 14 will be crucial

10x Research stated on social media that based on historical data analysis, Bitcoin's return tends to flatten in August and decline in September. However, favorable factors from U.S. interest rate policy, rate cuts, and the election schedule may buffer any downward pressure from the unlocking of $1 billion in tokens in August. Bitcoin's dominance is creating new highs in this cycle and having a significant impact.

They believe that Bitcoin is expected to eventually break through new highs, but it may need "macro" assistance, with the Fed's interest rate decision on August 1 and the CPI report on August 14 being crucial.