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Bitcoin (BTC) and Altcoins Take a Downturn, a Bear Trap? Quant Rallies 150% From Market Lows

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Bitcoin (BTC) price climbed to fresh highs on June 25 after a string of positive news, first were the speculations on Twitter that lawmakers in Paraguay plan to present a bill to make BTC legal tender. Second, the President of El Salvador announced an airdrop of $30 worth of Bitcoin (BTC) to every Salvadoran adult who downloads the government’s Bitcoin wallet app.

President Bukele also stated that the country’s Bitcoin law recognizing BTC as a legal currency nationwide will come into effect on September 7. There are calculations that this move may add more than $100 million in buying pressure on markets.

Third, the broader markets rallied after U.S. President Joe Biden disclosed that he had reached an agreement on a $953 billion bipartisan infrastructure spending plan with the Senate. Shortly after the news development, Bitcoin price rallied to $35,500 before pulling back to lows of $31,501 as of press time.

Bitcoin’s selling pressure spilled over into the Altcoin market, most tokens such as Ethereum (ETH, -8.63%), Uniswap (UNI, -11.60%), Cosmos (ATOM, -9.53%), The Graph (GRT, -11.42%), Kusama (KSM, -11.87%), Telcoin (TEL, -8.49%), BakeryToken (BAKE, -14.58%) were trading down as of press time.

Notable exceptions to the market downturn remains Dogecoin (DOGE, +6.71%), Shiba Inu (SHIB, +5.13%), Celo (CELO, +21.10%), Nano (NANO, +3.33%), Quant (QNT, +43.84%). An exceptional performer in the day remains Quant which rallied from lows of $42.90 on June 22 to intraday highs of $105.14 on June 24 following a Coinbase pro listing.

QNT/USD Daily Chart

Quant subsequently gained 150% from its market lows.

Bitcoin (BTC) Takes a Downturn, a Bear Trap?

A bear trap is a tricky technical pattern that occurs when the performance of an asset incorrectly signals a reversal of a rising price trend. This may be quite hard to spot as frequently, downtrends are interrupted by brief periods of recovery or relief rallies during which prices temporarily rise.

Cryptoquant CEO, Ki-Young Ju had earlier stated on June 21 that Bitcoin may be in a bear market based on whale capitulation “I hate to say this, but it seems like the BTC bear market confirmed. Too many whales are sending BTC to exchanges.”

If this holds, it may seem that Bitcoin’s rebound to highs of $35,500 may be a dead cat bounce. While there’s no perfect way to label a bull or bear market, the classic Dow Theory states that higher highs and higher lows describe an uptrend (bull market) while lower highs and lower lows describe a downtrend (bear market).

Cryptoanalyst, RektCapital stated on June 25 ”Yesterday, #BTC broke above the weekly higher low on the daily timeframe. Naturally, today $BTC is in the process of attempting to turn this HL into support. Support tests of this higher low aren’t always clean but generally, BTC needs this retest to move higher”.

Bitcoin ($BTC) Daily Active Addresses, Courtesy: Santiment

The sentiment however remains mixed for Bitcoin as JP Morgan in a note sent to investors detailed its reasoning to see the fair value of Bitcoin between $23,000–$35,000 over the medium term.

As Bitcoin (BTC) price failed to hold above the $35,000 threshold, JP Morgan expects an overall bearish move below the key price level based on the BTC-to-Gold volatility ratio. JP Morgan noted that institutional appetite for Bitcoin at the $35k level was rather low as not many institutions are joining MicroStrategy’s hunt to buy the dip.

According to JPMorgan, another major factor that might hinder a likely bull run is the end of a six-month lock-up period for the Grayscale Bitcoin Trust fund as July 19 will see the most significant single unlocking day, with 16,000 BTC worth released.

On the other hand, an on-chain analytics firm, Santiment notes that what remains to be seen for Bitcoin’s rise is an uptick in address activity stating ”BTC is back at $32.4k after a rebound above a $34.6k high Wednesday. On the 30-day rolling scale of daily active address scale, July 13, 2020, was the last time the $BTC network was this low”.

Image Credit: Santiment, Shutterstock

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