Bitcoin Price Hovering Around $58,500 As German Government Transfers Drag On

• Spot Bitcoin ETFs saw $294.8 million in inflows on Tuesday, the highest since June 6.
• The German government’s transfer of 6,306.9 BTC worth $362.12 million to exchanges on Tuesday could negatively impact the price of Bitcoin.
• Supply chain data shows miners are earning less than the historical average, indicating lower profitability or less selling pressure.

Bitcoin (BTC) price has encountered resistance near the weekly level of $58,375 over the past three days, currently trading slightly lower near $57,339, up 1.12% on Tuesday. On-chain data suggests miners are earning less than the historical average, suggesting lower profitability or reduced selling pressure. Spot Bitcoin ETFs received $294.8 million in inflows on Tuesday, the highest since June 6. Technical analysis shows bullish divergence signals from the relative strength index (RSI) and Awesome Oscillator (AO) indicators, indicating potential momentum for an upside rally.

Daily Market Drivers Digest: Bitcoin Spot ETF Receives $294.8 Million Inflows on Tuesday

• On Tuesday, inflows into US spot Bitcoin ETFs totaled $294.8 million, the highest since June 6.
• This growth indicates growing investor confidence, hinting at a possible short-term rally in the price of Bitcoin. Net inflow data from ETFs is crucial for assessing investor sentiment and understanding market dynamics. Collectively, 11 U.S. spot Bitcoin ETFs currently hold a total of $49.47 billion in Bitcoin.

Bitcoin Spot ETF Net Inflow Chart

• According to Arkham Intelligence, the German government moved 6,306.9 BTC worth $362.12 million from its wallet to Kraken, Cumberland, 139Po (likely an institutional deposit/OTC service), and the bc1qu address on Tuesday. This significant transfer activity may have caused FUD (fear, uncertainty, doubt) among traders, potentially contributing to a decline in the price of Bitcoin. Due to the recent moves, the German government has recovered 5,366 BTC from exchanges including Kraken, Bitstamp, and Coinbase. The German government currently holds 22,847 BTC worth $1.32 billion.

• According to Lookonchain, the whale deposited 809 BTC worth $45.18 million on Binance. Depositing BTC to an exchange increases the supply, which causes the price to drop. Since June 27, this whale has deposited 7,790 BTC worth $468 million on Binance and currently holds 6,559 BTC worth $379 million.

• According to CryptoQuant, the Puell Multiple indicators for Bitcoin provide valuable insight into the cryptocurrency’s mining profitability cycles by measuring the relationship between Bitcoin’s daily issuance value in US dollars and its 365-day moving average.
• When the Puell Multiple is high, it means that Bitcoin miners are earning higher USD rewards than the historical average, potentially leading to increased coin selling to cover expenses or make a profit. Conversely, a low Puell Multiple suggests that miners are earning less than the historical average, which may indicate decreased profitability or less selling pressure from miners.
• The Puell Multiple for Bitcoin currently stands at 0.7, indicating lower miner rewards in USD terms compared to historical averages and potentially indicating a period of declining profitability or reduced selling pressure.
• Additionally, the metric declined significantly during the 2016 and 2020 bull cycles, coinciding with significant upward trends in Bitcoin. Similar patterns are currently being observed, indicating a potential correction period nearing its conclusion. While pinpointing the exact end of this correction phase is challenging, signs point to a potential bull rally beginning by Q3 2024.

Bitcoin Puell Multiple Chart

Technical Analysis: BTC Faces Resistance Near $58,500

Over the past three days, Bitcoin price has encountered resistance at the weekly resistance level of $58,375 and is trading below it around $57,339, up 1.12% on Tuesday.

Additionally, the formation of a lower low on the daily chart on July 5 contrasts with a higher high in the Relative Strength Index (RSI) over the same period. This development is called a bullish divergence and often leads to a trend reversal or short-term rally.

If BTC closes above the weekly resistance level of $58,375, it could rally by 9% and re-reach the daily resistance level of $63,956.

BTC/USDT Daily Chart

However, if BTC closes below the daily support level of $52,266 and forms a lower low in the daily time frame, it could mean that the bearish sentiment remains. Such a development could trigger a 4% drop in Bitcoin price and return to its daily low of $50,521 from February 23.