Bitcoin price consolidates near $58,500 despite reduced miners selling pressure

Bitcoin (BTC) price has encountered resistance near the weekly level of $58,375 over the past three days, currently trading just below at around $57,339, marking a 1.12% increase on Tuesday. On-chain data indicates miners earn less than the historical average, suggesting reduced profitability or decreased selling pressure. Bitcoin spot ETFs saw inflows of $294.8 million on Tuesday, the highest since June 6. Technical analysis shows bullish divergence signals from the Relative Strength Index (RSI) and the Awesome Oscillator (AO) indicators, suggesting potential momentum for an upward rally.

Daily digest market movers: Bitcoin spot ETF received $294.8 million in inflows on Tuesday

• On Tuesday, US spot Bitcoin ETFs saw inflows of $294.8 million, the highest since June 6. 
• This uptick suggests growing investor confidence, hinting at a possible short-term increase in Bitcoin's price. The net inflow data from ETFs is crucial for gauging investor sentiment and understanding market dynamics. Combined, the 11 US spot Bitcoin ETFs currently hold reserves totaling $49.47 billion in Bitcoin.

Bitcoin Spot ETF Net Inflow chart

• According to data from Arkham Intelligence, the German Government transferred 6,306.9 BTC, valued at $362.12 million, from its wallet to Kraken, Cumberland, 139Po (likely an institutional deposit/OTC service), and address bc1qu on Tuesday. This significant transfer activity may have triggered FUD (Fear, Uncertainty, Doubt) among traders, potentially contributing to a decline in Bitcoin's price. As of recent movements, the German Government has received 5,366 BTC back from exchanges, including Kraken, Bitstamp, and Coinbase. Currently, the German Government holds 22,847 BTC, valued at $1.32 billion.

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

• According to CryptoQuant, Bitcoin's Puell Multiple indicators offer valuable insights into the cryptocurrency's mining profitability cycles by measuring the ratio between Bitcoin's daily issuance value in USD and its 365-day moving average. 
• When the Puell Multiple is high, it indicates that Bitcoin miners are earning higher USD-denominated rewards than historical averages, potentially leading to increased coin sales to cover expenses or capitalize on profits. Conversely, a low Puell Multiple suggests that miners earn less than the historical average, which could indicate reduced profitability or less selling pressure from miners. 
• Currently, Bitcoin's Puell Multiple stands at 0.7, signaling lower USD-denominated rewards for miners than historical averages and potentially indicating a period of reduced profitability or decreased selling pressure.
• Additionally, the metric saw significant declines during the bull cycles of 2016 and 2020, coinciding with Bitcoin's substantial upward trends. Similar patterns are currently observed, suggesting a potential adjustment period nearing its conclusion. While pinpointing the exact end of this adjustment phase is challenging, indications point to a potential start of a bullish rally by the third quarter of 2024.

Bitcoin Puell Multiple chart

Technical analysis: BTC faces resistance around the $58,500 level

Bitcoin's price encountered resistance at the weekly resistance level of $58,375 in the past three days and trades below it around $57,339, 1.12% up on Tuesday. 

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

If BTC closes above the $58,375 weekly resistance level, it could rise 9% to revisit the daily resistance at $63,956.

BTC/USDT daily chart

However, if BTC closes below the $52,266 daily support level and forms a lower low in the daily time frame, it could indicate that bearish sentiment persists. Such a development may trigger a 4% decline in Bitcoin's price to revisit its daily low of $50,521 from February 23.