Bitcoin (BTC) is facing a “collapse” and distribution despite a new macroeconomic paradigm looming.
That was one of the conclusions of quantitative bitcoin and digital asset fund Capriole Investments, which warned in its latest update that bitcoin is “not yet” ready for an uptrend.
Capriole: Bitcoin Basics Say “Not Yet”
US stocks are booming and the Federal Reserve may be at the end of its toughest monetary tightening ever – but Bitcoin hasn’t responded.
With traders forecasting a return to levels near $25,000 or worse, Capriole believes more time is needed for the new macroeconomic reality to take hold.
“As Bitcoin faltered, the S&P500 posted its longest winning streak in years and the Fed has essentially suspended rate hikes in what is currently the tightest monetary policy on record,” wrote founder Charles Edwards.
“Essentially, we are at a macro tipping point and entering (other things being equal) a new surveillance policy that should be more favorable to Bitcoin for years to come. This is a positive background for Bitcoin. But today, the technicals and fundamentals tell us, “Not yet.”
While Edwards concluded that the US could give the green light to a Bitcoin spot exchange-traded fund (ETF) to turn the tide, Bitcoin remains below resistance for both the long and short term.
“The next support levels are $28K, $24K and low $20K; each offering significantly better relative odds,” he continued.
Therefore, using the Wyckoff method, it is the “distribution” that currently characterizes BTC price action.
“Technical data with a short timeframe: Breakdown! The $30,000 support has failed and a new downtrend has formed,” Edwards summarized.
“This is a low-time-frame Wyckoff distribution. If the magnitude of the downturn matches the upleg, the target of this move is around $25,000.”Annotated BTC/USD chart. Source: TradingView
BTC price hits 6-week low
As Cointelegraph reported, Capriole is far from the only market participant predicting a deterioration in BTC price conditions before they improve.
Related: Bitcoin Loses $29,000 as Traders Mark Key BTC Price Levels to Watch Next
On-chain monitoring resource Material Indicators argued this week that multiple lower levels remain “possible” for Bitcoin after BTC/USD decided against a rally on last week’s US macro data.
This showed that inflation was decelerating faster than forecast, theoretically increasing the likelihood of a Fed policy reversal sooner rather than later.
Meanwhile, in his recent interview with Cointelegraph, Edwards himself stuck to his earlier long-term forecast. Bitcoin, he suggested, would take up to a year for the bullish momentum to really kick in.
“For the most part, that mindset has survived to this day. Bitcoin is up about 30% steadily since February,” he said.
“Today’s difference is that this reduces the relative value opportunity a bit and we now face major price resistance at $32,000, which marks the bottom of the 2021 bull market range and the confluence with large weekly and monthly order blocks.”
BTC price action surged to $28,574 after Wall Street opened on Aug. 1, marking its lowest level since mid-June, according to data from Cointelegraph Markets Pro and TradingView.
BTC/USD 1-day chart. Source: TradingView
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