June has been off to a turbulent start for Bitcoin. The crypto rallied to highs of $10,400 at the start of the month before shedding $1,800 off its price in a brief decline to lows of $8,600 seen on some major trading platforms.
Analysts do believe that this price action – despite being less than ideal for leveraged traders – may point to there being an influx of sidelined money into the nascent digital asset.
This does seem to bode well for its mid-term outlook, as it suggests that BTC remains fundamentally strong as fresh capital begins entering the market.
This fundamental strength appears to be reflected in the crypto’s technical strength as well, as analysts are noting that its market structure still heavily favors buyers.
Bitcoin Sees Influx of Fresh Capital Following Monthly Open
Shortly after Bitcoin’s monthly open, the cryptocurrency rallied up to highs of $10,400 in a sharp movement that came about after it had been caught within a tempered uptrend over a week-long period.
The rally to these highs lasted for less than 12-hours, however, as an overnight consolidation phase was followed by an influx of selling pressure that led its price to see a massive decline.
This decline even reached as far as $8,600 on some trading platforms, leading nearly $100 million in margin positions to be liquidated.
After declining to these lows, buyers stepped up and helped the cryptocurrency push higher.
At the time of writing, Bitcoin is trading up just under 2% at its current price of $9,750. It does appear to be facing some selling pressure here.
One analyst recently noted that Bitcoin’s sharp rise after its monthly open was driven by the entrance of sidelined money into the market.
“What happens when sidelined monies become eager to hop onto a rapidly trending asset? They bid the monthly open HEAVILY,” he noted while pointing to the below chart.
If it was retail spot buying pressure that drove this movement, then the subsequent decline was likely the result of leveraged traders shorting the resistance.
BTC Remains Technically Strong
This turbulence hasn’t done any severe damage to Bitcoin’s technical outlook.
One popular cryptocurrency analyst spoke about this in a recent tweet, explaining that he isn’t seeing “too many problems for BTC” at the present moment, also adding that the market structure is still trending upwards.
“I’m not seeing too many problems for BTC at this point. Structure is still upwards trending, with a deviation above the previous high. $9,700-9,800 could be a problem area. But the crucial zone of $9,150-9,300 is still providing support.”
If Bitcoin is able to break above the resistance region it is currently trading within, it is possible that another visit to the five-figure price region is imminent.
This next uptrend could also be bolstered by this newly injected capital.
Featured image from Shutterstock.
Credit: Source link