The price of Bitcoin briefly dipped below $31,000 this morning, then quickly bounced back to $31,000 as Bank of America (NYSE: BAC) announced it will allow traders to trade Bitcoin futures.
Bitcoin jumped to $31.8K this morning after another positive news day for the crypto-currency. The last time bitcoin hit $31K was back in November 2017. Earlier today, Bank of America confirmed that it will commence Bitcoin futures trading “later this year.” This news was mainly welcomed by the market, which has been struggling to break above $3,000 for the past few weeks.
Bitcoin (BTC) rebounded during the 16th century. July moved away from the $31,000 support level as new data confirmed the importance of the current price level.
1-hour candlestick chart of BTC/USD (Bitstamp). Source: TradingView
No travel for $42,000?
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD tested multiple times on Friday, but has not yet broken through the $31,000 level.
This was followed by a late jump to around $32,000 as unconfirmed reports indicated that Bank of America had given the green light for bitcoin futures trading.
Market participants have mixed opinions on the near-term outlook, with trader Michael van de Poppe noting Thursday that $31,000 is something of a last frontier for bitcoin – after losing it, it makes sense that $29,000, or even $24,000, is the next step.
Another crypto-Ed trader was also undecided that day. Earlier this week, he said bitcoin could rise to the high of $42,000, before falling back and challenging the $30,000 support level.
The fact that BTC is hitting new lows belies the idea of a continuation of this rise, he wrote in an update. Even a drop in the US dollar currency index (DXY), which is traditionally inversely correlated with BTC, would not help the bulls significantly, he added.
Update ⬆️
BTC hits new lows, refutes idea of a sustained rebound.
I still think the DXY should pull back, but it’s doubtful this will drive BTC to 42k.
Maybe there is no hidden game in the charts and BTC is just terribly weak and I have lost my mind pic.twitter.com/3nr65V9y4Z
– Crypto_Ed_NL (@Crypto_Ed_NL) 16. July 2023
Meanwhile, new data shows significant activity on the network at current price levels.
According to the Glassnode blockchain monitoring source, 9.93% of bitcoin supply was between $31,000 and $34,300 – an obvious area of interest for buyers and sellers.
At $12,000, it is now convincingly the largest cluster in terms of volumes achieved, the company said.
An annotated chart of the distribution of the UTXObitcoin realization price. Source: Glasnode/ Twitter
Cointelegraph has previously noted that $30,000 itself is a significant level in the minds of traders, large and small, whose behavior has shifted from a sell mentality to a buy mentality in recent weeks.
Altcoins lose average sentiment
A look at altcoins, meanwhile, highlighted the lack of bullish sentiment in the crypto-currency markets as the end of the week approaches.
Most of the top fifty tokens in terms of market capitalization suffered larger losses than BTC/USD, up to 12% in the absence of a price trigger.
Ether (ETH), the largest altcoin, has moved closer to a crucial support zone around USD 1,800. The start of a new accumulation phase has become very likely, Van de Poppe said in a YouTube update on Thursday, before volatility resumed.
The growing dominance of bitcoin, which reached 46% on the day, exacerbated altcoin’s problems.
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