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Bitcoin has been stuck in the $9,000s for the past two months, trading between $8,500 and $10,000 for weeks on end.
While the cryptocurrency has maintained the $8,500 support level on multiple occasions, a key indicator shows that the bullish momentum is weakening.
Related Reading: Crypto Tidbits: BTC At $9k, Grayscale Ethereum Trust, Cryptocurrency & PayPal
Bitcoin Has “Weakening” Bullish Momentum: Analyst
According to Brave New Coin analyst Josh Olszewicz, the Ichimoku Cloud indicator shows that Bitcoin has “weakening bullish momentum” due to the consolidation:
“Cloud still shows weakening bullish momentum. If you are bearish, you want an e2e to 7.1. If you are bullish, you want a TK cross recross above Cloud with a $13k target.”
Olszewicz added that he thinks BTC is currently in an “awkward spot” that is disallowing him from taking “either position with conviction.”
One-day BTC price chart with Ichimoku Cloud. Chart from TradingView.com; chart made by Josh Olszewicz (@CarpeNoctum on Twitter).
Two Factors Could Upset the Bitcoin Bull Case
Olszewicz is indicating that per his technical analysis, Bitcoin is trapped in no man’s land. Fundamentals, instead, may give insight into which way the cryptocurrency will head next.
Although there has been increased “HODLing” by Bitcoin investors, there are three factors that threaten to send BTC lower:
- Selling by miners: On-chain analyst Cole Garner reported last week that miners have withdrawn a large amount of Bitcoin to exchanges. This implies that miners want to liquidate a portion of their holdings as soon as possible due to potential downside.
- Selling by PlusToken: Spencer Noon reported that more than $450 million worth of Ethereum, EOS, Bitcoin, and XRP have moved from PlusToken-owned addresses. Other analysts have reported that some of the funds are slowly being siphoned into exchanges, presumably to be liquidated.
- A dropping S&P 500: Finally, a retracement in the S&P 500 could lead to a retracement in the price of Bitcoin. This is due to a correlation that has formed between the asset classes, which has been observed by JPMorgan and Goldman Sachs analysts. Guggenheim Investments’ global CIO Scott Minerd and Jeremy Grantham are among the analysts expecting a strong move lower in the S&P 500.
Related Reading: Uber & Robinhood Angel Investor: 99% of Crypto Projects Are Garbage
CME Traders Bet on Downside
Importantly, institutional investors trading the CME’s Bitcoin futures expect a move to the downside.
As reported by NewsBTC previously, CME futures data shows that institutions have cumulatively been building a net short position. One trader shared the image below, which shows that accounts with the tag “institutional traders” are cumulatively shorting 2,038 of the CME’s BTC futures contracts.
BTC price chart with CME's Commitment of Traders report data. Chart from TradingView.com; made by Byzantine General (@Byzgeneral on Twitter).
Featured Image from Shutterstock Price tags: xbtusd, btcusdt, btcusd Key Indicator Says BTC's Momentum Is Weakening: Where Will BTC Head?
