Bitcoin failed to rise above the $32,300 level. The supply zone proved too strong. At the same time, the Hash Ribbons indicator, made a bearish cross. What does it mean for the price of BTC?
Bitcoin on the weekly chart
Traditionally, we start our analysis by looking at Bitcoin’s situation on the weekly chart. Here there are some key developments. First of all, we can see that the leading cryptocurrency managed to reach a new this year’s peak of $31,862. However, the supply zone proved strong enough for a clear rejection to occur. In the end, Bitcoin recorded an increase of 0.3% in the past week, but until the last moments it was not clear whether the ovum would close in the green or red.
In addition, the RSI still remains high at 61. However, at the same time, the aforementioned indicator is drawing a clear local bearish divergence. The most important factor of the chart, however, becomes Hash Ribbons, which indicated the time of capitulation of BTC miners for the first time since last November.
Bitcoin on the daily chart
Meanwhile, the daily chart of Bitcoin shows clear local declines, supported, of course, by the bearish RSI divergence. It is worth mentioning that a bullish divergence also appears at the same time. However, it is very weak and easy to negate, hence we do not mark it for the time being.
If this divergence between the indicator and the price of BTC does not manage to raise the value of the cryptocurrency, we can expect slightly deeper declines. Their range seems quite obvious to predict. The level of $28,600 is not only a horizontal support, but also a point of convergence with the 100-day moving average. This, in turn, has historically repeatedly proven to be an excellent rebound level during both declines and upward attacks.
Such strong rejections as we are currently seeing in Bitcoin’s attempt to reach $32,300 very often result in slightly deeper price pullbacks. This situation allows the price to gain liquidity and renew the attack. The price then gains a kind of “momentum”, which makes the next attempt to break through the resistance much more likely to succeed.
Bearish Hash Ribbons cross and its impact on the BTC price so far
It is almost becoming a tradition to see a summer slump in the condition of Bitcoin miners. This has happened in the past three years and is also happening now. Capitulation on the Hash Ribbons indicator, as it is referred to, occurs when the cost of mining BTC exceeds the profits from the sale of coins. This can result in increased selling pressure. Interestingly, however, this has not always resulted in an actual retreat in the price of the cryptocurrency.
The Hash Ribbons indicator has already marked the aforementioned event 14 times in its history. On three occasions, we observed rallies after its occurrence. On the other hand, six times there were sideways movements, and five times there were declines.
On the other hand, it is worth remembering that after the capitulation period is over, a buying signal will appear on the indicator, which historically has been incredibly strong and heralded solid increases in the price of Bitcoin.
Bitcoin’s dominance has reached a support zone
As we predicted, Bitcoin’s dominance has fallen to the 50% level. It is now in a support band, where, moreover, the 100-day moving average has set in. In our opinion, this is a potential place for a rebound.
However, it is worth remembering that this situation is also the aftermath of Ripple’s resounding victory over the SEC. It resulted in a dynamic rise in the price of XRP, as well as many other altcoins. If this short-term sentiment manages to hold for the long term and the 100-day SMA is lost, however, there could be a chance for a slightly stronger altcoin season.