5 things to know in Bitcoin this week Fear spikes in 3 months as $26.4K becomes crucial.

Bitcoin (BTC) has had a busy week, but is now circling some classic trend lines near $26,000. The BTC price has remained stable despite some brutal tests of traders’ resolve over the past seven days. Market participants are waiting for a clear direction to emerge as the largest cryptocurrency starts a new week’s trading. Traditional markets will only open on June 20 due to United States holidays, which gives at least one day’s grace before any surprises hit. BlackRock has filed for a Bitcoin spot exchange-traded fund (ETF), and rumors are now suggesting that Fidelity Investments might follow. Cointelegraph is looking at some of the major topics now under discussion among traders and analysts to see what it will take to inspire the BTC price to adopt a trend.

No relief for nervous Bitcoin traders

The latest weekly close for BTC/USD yielded little change over the past seven days, with the pair hovering just above $26,000. Traders are cautiously waiting for new cues on the direction, but not yet defaulting to a bearish view. Fellow trader Koala argued that upside and downside extremes centered on a $4,000-wide corridor, with lows likely to get swept before a return to $27,000. For Credible Crypto, the potential range was narrower, with $25,500 the lower boundary. Trader Pierre flagged two trend lines in the form of the four-hour and one-day as support and resistance levels, respectively. BTC price additionally circled the classic 200-week moving average (MA) at $26,600 to start the week, per data from Cointelegraph Markets Pro and TradingView.

Speculators in the spotlight

If the downside momentum returns for the Bitcoin price, on-chain analysis can provide a clearer view of support.

Analytics firm Glassnode has been focused on a key breakeven point for Bitcoin’s more speculative investor cohort, known as short-term holders (STHs), which corresponds to wallet entities that have held coins for 155 days or less.

The aggregate cost basis (CB) for these entities, which is the price at which they purchased coins within that 155-day window, currently sits at $26,400, roughly matching the 200-week moving average.

“The recent volatility in Bitcoin price action has been anchored around the Short-Term Holder Cost-Basis of $26.4K,” Glassnode argued in a tweet over the weekend.

“This suggests the STH-CB remains a pivotal level in determining both the direction and momentum of the local trend.”

Below $26,400, STHs begin to experience unrealized losses on their investment, as shown in an accompanying chart.

Glassnode has previously highlighted the significance of the STH cost basis, along with the equivalent for 155-day+ investors, known as long-term holders (LTHs), becoming a source of interest in particular after the November 2022 meltdown of the FTX exchange.

Macro cools after intense week

With US markets closed for the Martin Luther King Jr. holiday on June 19, macro catalysts for crypto markets will have to wait until later in the week.

While not as numerous or significant as the previous week’s events, these catalysts still have the potential to cause some surprise volatility.

The Federal Reserve is among them, with Chair Jerome Powell due to testify before Congress over two days from June 21.

After the Fed’s recent decision to pause interest rate hikes but leave the door open to resume them later, markets will be closely analyzing Powell’s language for hints about what might come next.

To cap off the week, June 22 will see the release of Purchasing Managers’ Index (PMI) data.

Among market participants, the focus is equally on Bitcoin’s correlation to traditional risk assets as it is on how macro triggers impact them.

“Not only has $BTC lost the positive correlation w/SPX and NDX, but we’ve also lost the inverse corr w/DXY,” trader Josh Olszewicz noted last week, referencing Bitcoin’s interaction with the S&P 500, Nasdaq and US Dollar Index, respectively.

Credible Crypto suggested that the recent disparity between BTC and SPX performance – sideways versus what various sources have called a “bull market rally” – may yet resolve in bulls’ favor.

Been seeing quite a few comments lately on the “weakness” of $BTC vs trad markets $SPX and how this is bad for crypto. Don’t mistake consolidation for weakness. Like a student who gets a good night’s sleep before a major exam – the more we rest before the big day, the better we… pic.twitter.com/FoCrvOskD1

— CrediBULL Crypto (@CredibleCrypto) June 18, 2023

Cointelegraph has often reported on the ups and downs of Bitcoin’s macro correlations in recent years. A notable theme post-2020 has been strength during periods of Fed liquidity injections and vice versa.

GBTC gets a BlackRock boost

While Bitcoin itself may not be offering much inspiration, one of its biggest investment vehicles is experiencing a resurgence in its own right.

The Grayscale Bitcoin Trust (GBTC) has begun a fresh attempt at narrowing its heavy discount versus the BTC spot price.

GBTC has traded at this discount – which is, in fact, a negative premium – since Bitcoin’s all-time highs in 2021. Since then, it has reached -50%.

Last week’s announcement of a Bitcoin spot price exchange-traded fund (ETF) filing by BlackRock appeared to induce a change of mood, and as of June 17, the premium had decreased to -36.6%.

As previously reported by Cointelegraph, changes were made despite disagreements about the true nature of BlackRock’s offering. Some claimed that it would not be a spot ETF, which is still prohibited in the United States.

Regardless, GBTC’s recent performance has been impressive, with a premium of 36.6% that is close to the new 2023 highs.

Buyers have also been making themselves known, with major client ARK Invest owning more than 5.3 million GBTC shares.

This week, there is speculation about an ETF offering from asset manager Fidelity Investments, but details have yet to emerge.

Investor Mike Alfred said, “I was long GBTC before this but this makes me more confident that it was the correct move.”

Market optimism sees repeated tests

Last week, crypto market sentiment was spooked due to the combined impact of legal action against exchanges and macroeconomic policy changes in the United States.

Related: Bitcoin bulls look to re-establish control — Will BNB, LTC, OKB and QNT follow?

The Crypto Fear & Greed Index shows how recent events have affected market sentiment, with June 15th seeing the lowest score since mid-March.

Although this suggests a more “fearful” environment than at any time since then, the Fear & Greed Index remains surprisingly stable. The lows were at 41/100, barely “fearful” at all, and subsequently returned to the “neutral” range.

As of June 19th, the Index measures 47/100.

Research firm Santiment also cited the BlackRock ETF story as potential fuel for markets, specifically because some reactions were hostile. Santiment explained last week that “the more negativity surrounding this story, the stronger likelihood of a continued rise” in crypto markets.

Magazine: Gary Gensler’s job at risk, BlackRock’s first spot Bitcoin ETF and other news: Hodler’s Digest, June 11–17

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