{"id":27754,"date":"2023-08-04T07:53:16","date_gmt":"2023-08-04T11:53:16","guid":{"rendered":"http:\/\/cryptocornercafe.com\/cafe\/?p=27754"},"modified":"2023-08-04T07:53:16","modified_gmt":"2023-08-04T11:53:16","slug":"bitcoin-breakout-or-breakdown-ark-invests-david-puell-shares-his-prediction","status":"publish","type":"post","link":"http:\/\/cryptocornercafe.com\/cafe\/2023\/08\/04\/bitcoin-breakout-or-breakdown-ark-invests-david-puell-shares-his-prediction\/","title":{"rendered":"Bitcoin Breakout Or Breakdown? Ark Invest\u2019s David Puell Shares His Prediction"},"content":{"rendered":"

David Puell, an on-chain researcher at Ark Invest, today shared his insights in a detailed report, offering a nuanced perspective on Bitcoin\u2019s current standing and future prospects. The report<\/a>, titled \u201cThe Bitcoin Monthly: July 2023,\u201d addresses several key topics that are central to understanding the current state of Bitcoin.<\/p>\n

These topics include a comprehensive market summary, an analysis of Bitcoin\u2019s low volatility and whether it indicates a potential breakdown or breakout, as well as a discussion on the impact of the Federal Reserve\u2019s tightening<\/a> policy as a leading indicator of price deflation.<\/p>\n

Ark Invest\u2019s Near-Term Bitcoin Price Prediction<\/h2>\n

Puell\u2019s analysis reveals a mixed, but mainly bullish outlook for Bitcoin, with the cryptocurrency ending July at $29,230, above its 200-week moving average and its short-term-holder (STH) cost basis of $28,328. This suggests a strong support level for Bitcoin, indicating a potential upward trend, notes Puell.<\/p>\n

However, Bitcoin\u2019s 90-day volatility, which dropped to 36% in July, a level not seen since January 2017, presents a neutral outlook. Puell explains, \u201cBased on its low level of volatility, we believe the Bitcoin price could be setting up to move dramatically in one direction or the other during the next few months.\u201d This could mean a significant price movement, but the direction \u2013 up or down \u2013 is uncertain.<\/p>\n

Puell also points to signs of miner capitulation as a bullish indicator. \u201cDuring July, the 30-day moving average of Bitcoin\u2019s hash rate dropped below its 60-day moving average, suggesting that miner activity had capitulated,\u201d he states. Miner capitulation is typically associated with oversold conditions in BTC price, hinting at a potential bullish reversal.<\/p>\n

The \u201cliveliness\u201d metric, which measures potential selling pressure relative to current holding behavior, also suggests a bullish trend. The analyst notes, \u201cIn July, liveliness dropped below 60%, suggesting the strongest long-term holding behavior since the last quarter of 2020.\u201d This indicates that more holders are keeping their coins rather than selling them, which could drive the price up.<\/p>\n

ARK\u2019s own short-term-holder profit\/loss ratio, which ended July at ~1, is also seen as a bullish sign. Puell explains, \u201cThis breakeven level correlates both with local bottoms during primary bull markets and with local tops during bear market environments.\u201d<\/p>\n

However, the future of Binance\u2019s BNB token, which is facing increased regulatory pressure, looks bearish according to Puell. He warns, \u201cAs regulatory pressure<\/a> increases on crypto exchange Binance, its native token, BNB, could be on the threshold of significant turbulence.\u201d If BNB breaks down, it could potentially impact the overall stability of the crypto market, including BTC.<\/p>\n

Macro Outlook<\/h2>\n

On the macroeconomic front, Puell discusses the potential impact of the Fed\u2019s 22-fold increase in interest rates, which he views as bearish for Bitcoin and the broader economy. He states, \u201cAccording to renowned economist Milton Friedman, monetary policy works with \u2018long and variable lags\u2019 that last 12-18 months, suggesting that the full impact of the Fed\u2019s 22-fold increase in interest rates has yet to hit.\u201d<\/p>\n

The Zillow Rent Index, which leads the Owners\u2019 Equivalent Rent (OER) by roughly nine months, suggests that Consumer Price Index (CPI) inflation<\/a> could decelerate significantly below 2% by year-end. Puell views this as a bullish sign for Bitcoin, as it could potentially increase the attractiveness of non-inflationary assets like Bitcoin.<\/p>\n

Lastly, Ark Invest takes a neutral stance on the falling US import prices from China, despite the yuan\u2019s depreciation by ~12% since February 2022. He notes, \u201cAll else equal, China exporters should have increased prices to offset the depreciation of the yuan. Instead, they have cut prices, harming their profitability.\u201d<\/p>\n

In conclusion, Puell\u2019s report presents a complex picture for Bitcoin. While there are a lot of signs for a potential bullish trend, there are also significant risks and uncertainties that could lead to bearish outcomes.<\/p>\n

At press time, the BTC price was at $29.152. The most crucial resistance at the moment lies at $29.450. If BTC can overcome this resistance, a breakout from the multi-week downtrend might be possible.<\/p>","protected":false},"excerpt":{"rendered":"

<\/p>\n

David Puell, an on-chain researcher at Ark Invest, today shared his insights in a detailed report, offering a nuanced perspective on Bitcoin\u2019s current standing and future prospects. The report<\/a>, titled \u201cThe Bitcoin Monthly: July 2023,\u201d addresses several key topics that are central to understanding the current state of Bitcoin.<\/p>\n

These topics include a comprehensive market summary, an analysis of Bitcoin\u2019s low volatility and whether it indicates a potential breakdown or breakout, as well as a discussion on the impact of the Federal Reserve\u2019s tightening<\/a> policy as a leading indicator of price deflation.<\/p>\n

Ark Invest\u2019s Near-Term Bitcoin Price Prediction<\/h2>\n

Puell\u2019s analysis reveals a mixed, but mainly bullish outlook for Bitcoin, with the cryptocurrency ending July at $29,230, above its 200-week moving average and its short-term-holder (STH) cost basis of $28,328. This suggests a strong support level for Bitcoin, indicating a potential upward trend, notes Puell.<\/p>\n

However, Bitcoin\u2019s 90-day volatility, which dropped to 36% in July, a level not seen since January 2017, presents a neutral outlook. Puell explains, \u201cBased on its low level of volatility, we believe the Bitcoin price could be setting up to move dramatically in one direction or the other during the next few months.\u201d This could mean a significant price movement, but the direction \u2013 up or down \u2013 is uncertain.<\/p>\n

Puell also points to signs of miner capitulation as a bullish indicator. \u201cDuring July, the 30-day moving average of Bitcoin\u2019s hash rate dropped below its 60-day moving average, suggesting that miner activity had capitulated,\u201d he states. Miner capitulation is typically associated with oversold conditions in BTC price, hinting at a potential bullish reversal.<\/p>\n

The \u201cliveliness\u201d metric, which measures potential selling pressure relative to current holding behavior, also suggests a bullish trend. The analyst notes, \u201cIn July, liveliness dropped below 60%, suggesting the strongest long-term holding behavior since the last quarter of 2020.\u201d This indicates that more holders are keeping their coins rather than selling them, which could drive the price up.<\/p>\n

ARK\u2019s own short-term-holder profit\/loss ratio, which ended July at ~1, is also seen as a bullish sign. Puell explains, \u201cThis breakeven level correlates both with local bottoms during primary bull markets and with local tops during bear market environments.\u201d<\/p>\n

However, the future of Binance\u2019s BNB token, which is facing increased regulatory pressure, looks bearish according to Puell. He warns, \u201cAs regulatory pressure<\/a> increases on crypto exchange Binance, its native token, BNB, could be on the threshold of significant turbulence.\u201d If BNB breaks down, it could potentially impact the overall stability of the crypto market, including BTC.<\/p>\n

Macro Outlook<\/h2>\n

On the macroeconomic front, Puell discusses the potential impact of the Fed\u2019s 22-fold increase in interest rates, which he views as bearish for Bitcoin and the broader economy. He states, \u201cAccording to renowned economist Milton Friedman, monetary policy works with \u2018long and variable lags\u2019 that last 12-18 months, suggesting that the full impact of the Fed\u2019s 22-fold increase in interest rates has yet to hit.\u201d<\/p>\n

The Zillow Rent Index, which leads the Owners\u2019 Equivalent Rent (OER) by roughly nine months, suggests that Consumer Price Index (CPI) inflation<\/a> could decelerate significantly below 2% by year-end. Puell views this as a bullish sign for Bitcoin, as it could potentially increase the attractiveness of non-inflationary assets like Bitcoin.<\/p>\n

Lastly, Ark Invest takes a neutral stance on the falling US import prices from China, despite the yuan\u2019s depreciation by ~12% since February 2022. He notes, \u201cAll else equal, China exporters should have increased prices to offset the depreciation of the yuan. Instead, they have cut prices, harming their profitability.\u201d<\/p>\n

In conclusion, Puell\u2019s report presents a complex picture for Bitcoin. While there are a lot of signs for a potential bullish trend, there are also significant risks and uncertainties that could lead to bearish outcomes.<\/p>\n

At press time, the BTC price was at $29.152. The most crucial resistance at the moment lies at $29.450. If BTC can overcome this resistance, a breakout from the multi-week downtrend might be possible.<\/p>\n

<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"colormag_page_layout":"default_layout","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[82],"tags":[],"class_list":["post-27754","post","type-post","status-publish","format-standard","hentry","category-blockchain"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/27754","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/comments?post=27754"}],"version-history":[{"count":0,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/posts\/27754\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/media?parent=27754"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/categories?post=27754"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptocornercafe.com\/cafe\/wp-json\/wp\/v2\/tags?post=27754"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}