Bitcoin opened the week on a tumultuous ride as price cascaded over 15% in two short days. An extreme volatility to the downside over the weekend and into Monday brought about a significant wipeout in the derivatives market. Regardless of this turmoil, Bitcoin is still doing well holding onto that range of $100,000–$110,000. Onchain activity is rampant with signs of cooling, foreshadowing what may be a period of consolidation.
Bitcoin’s recent price action is still very much trapped in a descending channel. Another important area of interest for investors and analysts is between $103,400 and $104,600. This zone coincides exactly with a daily FVG. It is further being supported by the 200-day exponential moving average (EMA), boosting prospects for a positive price bounce.
According to data provided by The Block Research, ~30 percent of BTC-denominated open interest has dropped out. It dropped by roughly 7%, from 360,000 to 334,000 BTC on Avalanche. Within 24 hours, $28.6 million in long positions and $25.2 million in short positions were liquidated, reflecting the market's sensitivity to price fluctuations.
The market’s enjoying its recent gains after the market’s big breakout move. It probably needs a reacceleration of demand in order to push prices up enough to make them profitable again. Without any bullish follow-through, that may open the door for bearish momentum to carry further into next week.
According to Glassnode data, there was little follow-through of just a $7.7 billion quarter-on-quarter increase in spot volume in Q2. Meanwhile, the amount of value transferred via Bitcoin has dropped 36% just this quarter. This decrease represents a significant absence of speculative haste in the direction of capital investors.
Despite the short-term volatility and cooling onchain activity, Bitcoin's long-term holders continue to accumulate, stacking 800,000 BTC per month in a record hodl run. This suggests strong conviction among long-term investors.
Market dynamics are more complicated than ever before. Given core inflation pushing up to 2.7% and broadening, the prospect for imminent rate cuts by the Federal Reserve are fading fast. This kind of macroeconomic environment continues to bear pressure on Bitcoin and other risk assets.
