Roughly $3 billion were injected into Bitcoin between July 21st and 22nd. The massive capital inflow was significant enough to allow its price to surge by more than 4%. The flagship cryptocurrency went from trading at a low of $9,161.28 to a high of $9,543.
On Thursday, July 23rd, the bullish price action resumed as demand for BTC continued to rise. The pioneer cryptocurrency opened the day at $9,518.25 and entered a narrow consolidation period that lasted until 15:00 UTC. At this point, the bulls stepped back in and injected another $1 billion into Bitcoin.
The substantial buying pressure was followed by a 1.91% price jump that saw BTC rise to a new monthly high of $9,678.32. Investors seem to have enjoyed the bullish price action to exit some of their long positions around this level. As sell orders began to pile up, Bitcoin entered a downtrend and dropped by 0.95% to close the day at $9,604.41.
Although the bellwether cryptocurrency was able to make a higher high, it remains to be seen whether it will also form a higher low to confirm that it has entered a new uptrend. The Tom Demark (TD) Sequential indicator on BTC’s 4-hour chart estimates that downward pressure would likely increase on July 24th. If this were to happen, investors must pay close attention to the $9,042 support level.
Breaking below this supply barrier will print a lower low and jeopardize the bullish outlook. But if Bitcoin can bounce from this support zone, it would create a higher high and confirm the beginning of a new uptrend.
Ethereum Aims For New Yearly Highs
A few hours before July 23rd’s open, Ethereum’s price shot up by 9.41%, signaling that it was poised to retest mid-February’s high of $289. However, the smart contracts giant went through an indecision phase as the new day kicked off that saw it trading around the open price of $264.30. By 15:00 UTC, it seems like the bulls had had enough of the lackluster price action and got back into the market.
The increasing levels of demand for Ether were so significant that it pushed its price up by 5.81% in a matter of one hour. The second-largest cryptocurrency by market cap surged to a high of $280.49, but this hurdle was able to reject the upward pressure. The rejection resulted in a 3.14% pullback to $271.66, but as the day came to an end, ETH rebounded to close at $275.50.
Given July 23rd’s price action, it seems that Ethereum is trying to rise towards new yearly highs. Nevertheless, the TD index also presented a sell signal on ETH’s 4-hour chart, estimating that a retracement is underway. The correction may be beneficial for the overall trend since it will let sidelined investors jump back into the market.
If so, a new inflow of capital would be needed for Ether to break above mid-February’s high and begin a new bullish cycle.
The top two cryptocurrencies by market cap have sparked interest among investors despite the lackluster price action seen over the past couple of months. As investors grow optimistic about what the future holds, they appear to have bought Bitcoin and Ethereum. The mounting buying pressure has led to significant gains over the past few days.
Nevertheless, the S&P 500 recently presented a sell signal on its daily chart, similar to what took place before March’s Black Thursday. While the market conditions are not the same and the U.S. just signed a deal with Pfizer for COVID-19 vaccine doses, crypto enthusiasts must be aware of the probabilities of a trend reversal in the U.S. stock market.
Given the correlation between the SPX and BTC, a retracement in this index could spill over to the cryptocurrency market. Traders beware!