The pair echoed equities in cool trading prior to the July 27 United States Federal Reserve decision on interest rates. Analysts were expecting several days of volatility, and despite buyer interest in Bitcoin being strong below spot price, everything could still change.
“Big week ahead for the markets,” Umar Ashraf, founder of trading tool TradeZella, forecast.
“Tons of big names reporting earnings alongside with the FOMC starting Tuesday followed by the announcement on Wednesday. Big week doesn’t always mean market must see action, it could be a time period for the market to digest info for next move.”
With traders primed for reactions, Bitcoin became unsettled by struggling to hold any of its 200-week moving averages (MA), 50-day MAs or realized prices, these lying at $22,700, $22,200 and $21,850, respectively.
The last of these, the price at which the average Bitcoin last moved, had been reclaimed as support just a week prior.
Comparing realized price behavior this year to previous bear market years, analyst Root warned that the next step could be another extended dive below the trendline.
Cycle comparison: either we find support here or we might get another arch below realized price like in 2014. Macro might indicate the latter.#Bitcoin#onchainpic.twitter.com/zfphUK2mzv— Root (@therationalroot) July 25, 2022
Adopting a more hopeful outlook, meanwhile, PlanB, creator of the stock-to-flow Bitcoin price models, noted that the speed with which Bitcoin bounced above its 200-week MA this month could belie underlying strength absent from similar bear phases.
“Normally it takes a lot longer after BTC goes below realized price, for BTC to jump back above 200-week moving average. But it already did,” he explained.
“Also, 200-week moving average and realized price already touched (that normally also takes longer).”
Small fish scoop up dumped institutional coins
Data, meanwhile, showed the extent of supply migration from larger to smaller investors in recent months.
“The 236,237 BTC number is derived from massive institutional blow-ups and other large known selling seen during the market stress in the last two months,” it wrote.
“The number does not account for other natural capitulation and hedging activity that usually occurs during crypto bear markets.”
Meanwhile, data from fellow on-chain analytics platform Glassnode showed that entities with 1 BTC or less in their possession were increasing faster than ever as an overall proportion of the BTC supply.