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How Will Bitcoin Move After the Rejection Of US$31,000?

The transfer of Bitcoin (BTC) assets confiscated by the American Government from Silkroad has sparked reactions from various groups, one of which is the analyst community. As stated by a leading crypto asset analyst, Michael van de Poppe who highlighted the transfer of 9,000 BTC from the Silkroad wallet via his Twitter account.

For information, Silkroad is a black market that is no longer operating because it was proven to facilitate illegal transactions. From the information gathered, this market held a significant amount of Bitcoin before it was closed by the authorities in 2013.

How Will Bitcoin Move After the Rejection Of US$31,000?

Recent transfers of significant sums have raised questions about the motives behind them and their potential impact on the market.

“Bitcoin underwent a correction when 9000 BTC moved from the Silkroad wallet,” said Poppe.

Poppe stated, in traditional financial markets, indexes and gold prices showed a marked increase. Global stock indexes experienced a fresh spike, driven by positive economic indicators and increased corporate profits. While gold is also on the rise at times, investors are looking for stability amidst market uncertainty.

In this complex development, he said, the US Dollar Index (DXY) hit a new yearly low. In addition, government bond yields appear to be on the verge of a significant decline.

When bond yields fall, it indicates an increase in demand for bonds, often triggered by risk aversion or a more accommodative monetary policy. Poppe also confirmed that a bull market will also take place in the near future.

Bitcoin has once again struggled to break through a key resistance level in the face of the new Consumer Price Index (CPI) data, returning to square one after barely hitting the US$31,000 level.

As Glassnode co-founder Negentropic explained, the cryptocurrency's lightning surge and subsequent decline was triggered by the formation of carefully placed buy and sell walls to limit volatility.

In this case, Negentropic uses the Bollinger Bands indicator to identify periods of high and low market volatility. From his analysis, volatility appears to have narrowed to its lowest level since January just before the release of the CPI data.

This diminution triggers a sudden increase in the price of Bitcoin. However, this increase lasted only a short time because the buy and sell walls that had been prepared to anticipate volatility succeeded in dampening the expected price fluctuations.

Negentropic notes that despite these changes, Bitcoin open interest remains low with little sign of positioning before the release of the CPI data.

However, the macroeconomic environment is not in favor of Bitcoin. With annual CPI inflation for June coming in at 3 percent, slightly below market predictions of 3.1 percent, and core CPI inflation at 4.8 percent, the Fed is likely to raise interest rates again as core CPI does not fall.

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