Bitcoin price is has been on a seesaw over the last few days, reacting to news of German Goverment and Mt. Gox BTC selling and repayments, respectively.
On July 8, BTC price dropped as low as $54,278 shortly after a Bitcoin wallet address linked to the German government sent approximately 16,000 BTC worth $900 million to various exchanges.
The price then turned up during the early Asian trading hours on Tuesday as German government entity received over $200 million worth of the asset back from various exchanges in late U.S. hours, helping the market sentiment.
The German Federal Criminal Police Office (BKA) received over $200 million from Kraken, Coinbase and Bitstamp back in the past 12 hours, according to Arkham data shows, indicating that while the assets were sent to these exchanges, they ultimately did not hit the market.
The German government had seized almost 50,000 BTC in 2013, worth over $2 billion at the time, from the operators of Movie2k.to, a film piracy website. It received the asset in mid-January after a ‘voluntary transfer’ from the suspects, as previously reported.
At the time of writing, Bitcoin was trading at $57,362, up 3.35% over the last 24 hours.
Approximately $240 million crypto liquidations accompanied Bitcoin’s return above $57,000. This included $51.45 million short BTC positions and $47.95 million long liquidations.
The largest single liquidation order happened on OKX involving a BTC/USDT swap valued at $11.64 million.
Bitcoin price outlook
At the time of publication, Bitcoin was fighting resitace from the 200-day exponential moving average (EMA) currently at $58,178. BTC bulls need to flip this level back into support as soon as possible ass spending more time below the 200-day EMA will eventually frustrate investors, threatening more losses.
On the upside, there is a bullish divergence from the daily relative strength index (RSI) as shown on the chart below. Notably, Bitcoin’s price dropped between June 24 and July 8, forming lower lows. But, in the same period, its daily RSI ascended, forming higher lows.
As a rule of technical analysis, a divergence between falling prices and rising RSI indicates strength in the prevailing uptrend, prompting traders to buy more at local dips.
As such, the price may climb from the current levels to produce a daily candlestick close above the 200-day EMA would suggest the ability of the buyers to sustain the recovery.
Key levels to watch on the upside are the psychological level at $60,000 and the major resistance level at $63,000, where the 50-day EMA and the 100-day EMA appear to converge. Overcoming this level will confirm a breakout from the downtend with BTC recording higher highs toward $65,000 and later $70,000.
On the downside, the RSI was still in the negative region at 36, suggesting that the market conditions still favoured the downside. The 100-day and the 50-day EMAs were about to produce a bearish cross, which if it materializes, it would add to the sell-side pressure, sending BTC lower.
If this happens, BTC will drop first toward the $55, 000 psychological level and later the July 5 low at $53,500. Below that, the $50,000 psychological level would be the best support line for buyers in the short term.