Bitcoin Weekly Forecast: BTC goes through range of emotions, from legal tender to Chinese miners exodus

  • Bitcoin price continues surging after bouncing from a critical demand zone.
  • The sudden spike in bullish momentum comes after El Salvador passed a bill recognizing BTC as legal tender.
  • Despite the uncertainty caused by developments in China, BTC exudes an overall bullish outlook.

Bitcoin price rallied wildly on the news of it becoming legal tender in El Salvador, but China’s clampdown on miners was equally palpable. BTC seems to be taking a breather before its uptrend resumes.

Legal tender, volcano money and miner exodus

Bitcoin price ended its downtrend as it bottomed on June 8, indicating that a reversal was due. Coincidentally, a bill passed to make BTC a legal tender in El Salvador on June 9. This was a historic win for the flagship cryptocurrency, which has come a long way.

Following the move, the President of El Salvador, Nayib Bukel, announced plans to build a Bitcoin mining hub that runs on 100% clean energy derived from volcanoes.

While Bitcoin enthusiasts were enjoying the victory, China was tightening the noose around Bitcoin miners’ necks as there were reports that Qinghai Province issued a document that calls for a ban on mining cryptocurrencies.

Speaking on the current state of miners in China, Kyle Davies of Three Arrows Capital stated on the UpOnly podcast,

They (Chinese crypto enthusiasts) are way more bearish than all of us; it’s off the charts, especially miners. They are physically moving out of China and setting up mines in other locations.

Due to the alleged energy shortage and strict restrictions on mining, the BTC hash rate has dropped by more than 20% since June 8.

To make matters worse, the Chinese search engines and social media applications blocked Binance, Huobi and OKEx, three of the world’s largest cryptocurrency exchanges by trading volume.

While these two developments were a major highlight of the week, US senator Elizabeth Warren attacked Bitcoin and other cryptocurrencies over the much-debated energy usage. 

What’s happening right now with cryptocurrencies, like Bitcoin and Dogecoin, it’s a wild west out there. And it makes it not a good way to buy and sell things and not a good investment and an environmental disaster. So, do we need some regulation around this? You bet we do.

Regarding the ransomware attacks, Warren added,

Every hack that is successfully paid off with a cryptocurrency becomes an advertisement for more hackers to try more cyber attacks.

Despite the concerns expressed by regulatory authorities, cryptocurrency adoption appears to be rising. Interactive Brokers’ (IB) chairman and CEO Thomas Peterffy stated recently that its customers were asking for cryptocurrency offerings. Although unclear on which cryptocurrencies IB will offer, the CEO noted it would do so by the end of summer this year.

Bitcoin price takes a breather

Bitcoin price rallied roughly 24% from $31,000 to $38,500 after El Salvador’s news. However, BTC has continued to move sideways as it grapples with the 50% Fibonacci retracement level at $36,774.

The likely course of action for BTC would be a minor retracement to the swing low at $34,800 set up on June 5, followed by a continuation of the upswing. Considering the consolidation taking place at $36,774, it could kick-start an uptrend in BTC price.

The bulls might target the swing high at $39,450 formed on June 3, followed by $40,841. If the buying pressure continues to compound, BTC price could tag the range high at $42,451.

Investors should note that $42,451 is the resistance level created by the left shoulder of a long-term head-and-shoulders pattern on a daily time frame. Therefore, it is likely Bitcoin price will face stiff resistance at this level.

BTC/USDT 4-hour chart

BTC/USDT 4-hour chart

Despite the bullish outlook portrayed by the technicals, on-chain metrics have remained bearish. The on-chain volume for BTC has dropped from a peak of 126.35 billion BTC in mid-May to 33.6 billion BTC in the second week of June.

This 73% decline suggests that investors are fleeing from the Bitcoin network and might be reallocating their funds or booking profits. 

BTC transaction volume chart

BTC transaction volume chart

Although the supply of BTC on exchanges dropped from 2.69 million BTC in mid-May to 2.58 million BTC on June 7, a reversal seems to be taking place.

From Jun 7 to date, 20,000 BTC have entered centralized entities, suggesting a potential sell-off might be on its way.

BTC supply on exchanges chart

BTC supply on exchanges chart

Adding credence to the above metric’s bearish outlook is the all exchanges netflow metric, which showed that 15,460 BTC flowed to crypto exchanges on June 10.

BTC all exchanges netflow chart

BTC all exchanges netflow chart

Moreover, the Bitcoin funding rate is barely climbing out of the negative zone, suggesting that investors are still expecting Bitcoin price to head lower, painting their bearish outlook.

BTC funding rate chart

BTC funding rate chart

At the moment,Bitcoin price finds itself in limbo. Despite eyeing a climb to $42,000, the bearishness does not seem to elude the flagship cryptocurrency. BTC looks poised to rally in the short term, but the threat of a downside still looms.

If BTC corrects prematurely, shattering the range low at $31,097, the bullish thesis will face invalidation. In such a case, Bitcoin price might tag the swing low set up on May 19 at $30,000.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Solana price eyes a return to $120 as confidence in SOL fades

Solana price continues to face some strong technically and fundamentally bearish scenarios. In addition, concerns about Solana’s network stability and scalability remain. Those concerns continue to weigh in on the bearish price action ahead.

More Solana news

MATIC on the march to $3 but must hold this support zone or face strong selling pressure

MATIC price action has fallen below the rising wedge for the second time in January; the first occurrence was on January 8. The Kijun-Sen is the final support zone, and if it fails, MATIC could drop 20%. The recent fundamentals are bullish.

More Polygon news

Top 3 Price Prediction: Crypto market seems ready to rally

Bitcoin price continues to sit on top of the neckline of a head-and-shoulders pattern, generating anxiety amongst bulls and bears alike. Ethereum price is testing the daily Tenkan-Sen as a support zone that could turn into a higher low.

More Bitcoin news

Dogecoin liquidity deepens as DOGE goes live on Thorchain

Thorchain announced earlier today that the Dogecoin liquidity pool is live on the decentralized liquidity network. As on-chain activity would increase, the deep liquidity fuels a bullish narrative for Dogecoin price. 

More Dogecoin News

BTC eyes retest of $50,000

Bitcoin price shows a resurgence of retail interest as it bounced off a crucial psychological level. The recent uptrend is preparing a base on a short-term time frame so BTC can kick-start a larger leg-up. Interestingly, on-chain metrics are lining up with the bullish outlook portrayed from a technical perspective. An uptrend now seems inevitable for BTC and, therefore, the larger ecosystem.

Read full analysis