Bitcoin (BTC) is currently facing a breakdown and distribution, despite the anticipation of a new macroeconomic paradigm. According to quantitative Bitcoin and digital asset fund Capriole Investments, Bitcoin is not yet ready for a bullish breakout.
While the United States equities market is thriving and the Federal Reserve is winding down its strict monetary tightening policies, Bitcoin has failed to respond positively. Capriole believes that it will take more time for the new macroeconomic reality to fully sink in.
Founder Charles Edwards explains that the current macro pivot point and the shift towards a more favorable monetary policy regime should provide a positive backdrop for Bitcoin in the coming years. However, at present, the technical indicators and fundamentals are suggesting otherwise.
Capriole suggests that the approval of a Bitcoin spot price exchange-traded fund (ETF) in the US could potentially turn the situation around for Bitcoin. However, for now, Bitcoin remains below resistance levels on both long and short timeframes.
According to Edwards, the next support levels for Bitcoin are at $28,000, $24,000, and low-$20,000s. Each of these levels offers a better relative opportunity for investors. Edwards summarizes the current BTC price action as a low timeframe Wyckoff distribution, indicating a breakdown in support at $30,000 and the emergence of a new bearish trend. If the upcoming downswing matches the recent upswing, the target for Bitcoin’s price would be around $25,000.
Capriole is not alone in predicting a further decline in BTC price before a potential reversal. On-chain monitoring resource Material Indicators also suggests that Bitcoin could experience multiple lower levels in the future. Last week’s US macro data, which showed a slower-than-predicted inflation rate, increased the possibility of a pivot in Fed policy sooner rather than later. This could have contributed to the lack of bullish momentum for Bitcoin.
Charles Edwards himself maintains his long-term forecast that it could take up to a year before Bitcoin experiences significant bullish momentum. He acknowledges that Bitcoin has seen a steady increase of around 30% since February but notes that the relative value opportunity is slightly less now. Bitcoin is currently trading into major price resistance at $32,000, which represents the bottom of the 2021 bull market range.
In recent trading, BTC price hit a six-week low, reaching $28,574 after the Wall Street open on August 1st. This is the lowest level Bitcoin has reached since mid-June.
It is important to note that this article does not provide investment advice or recommendations. All investment and trading decisions involve risks, and readers should conduct their own research before making any decisions.