Bitcoin price on July 21, 2021

Bitcoin (BTC) is

already regaining $32,000 – It’s as if the drop below $30,000 was a mere “bump in the road” quickly erased by the bulls. But indicators show that this strong rally should not cause traders to discount the possibility of another break of $30,000 or even $29,000.

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Strong and fast recovery: between hype and caution

Bitcoin hit an intraday low of $29,341 on Bitfinex yesterday, July 20, 2021. While the bulls lost the $30,000, they managed to defend the $29,000 support and thus prevent a further fall.

Today, July 21, 2021, is strongly bullish with Bitcoin seemingly easily regaining 3 major supports: the $30,000, then the $31,000, and finally the $32,000, narrowly lost in the early evening. Bitcoin is trading at $31,797 at the time of writing. It is currently recording a daily profit of 7.61%, absorbing the 2 red candles of the last 2 days.

Should we now consider this adventure below $30,000 to be a thing of the past? An interpretation of the raw on-chain

data shows a priori an accumulation of Bitcoins and thus the presence of solid bases for a rise. Glassnode data shows average monthly withdrawals of 32,000 BTC from exchanges. These withdrawals continued even after the bears managed to break the $30,000 support.

But as analyst Marcel Pechman points out on Cointelegraph

, such an analysis would then not take into consideration withdrawing these Bitcoins with a view to not holding them in private wallets for the long term, but using them for decentralized finance to look for other ways to monetize them. <img width=”637″ height=”288″ src=”//www.w3.org/2000/svg’%20viewBox=’0%200%20637%20288’%3E%3C/svg%3E” alt=’Net exchange flow argues for bullish Bitcoin, according to Glassnode data’ /><img width=”637″ height=”288″ src=”https://yellowrocketagency.com/wp-content/uploads/2021/07/21juil-glassnode.png” alt=”Net flow from exchanges argues for bullish Bitcoin, according to Glassnode data” />Net flow of Bitcoin from exchanges – Source: Glassnode

Data from Cointrader.pro shows that 40,660 BTC were used in the last 3 months to generate Wrapped Bitcoin (WBTC) and RenBTC (RENBTC), showing increased use of Bitcoin in the DeFi.

<img width=”648″ height=”337″ src=”https://yellowrocketagency.com/wp-content/uploads/2021/07/21jul-wbtc.png” alt=’Bitcoin is increasingly used in DeFi as shown by wBTC and RenBTC offerings’ />RenBTC and wBTC offerings – Source: Cointrader.pro

This number excludes deposits at BlockFi, Nexo, Len, and the multiple services that pay for their users’ cryptocurrency deposits

.

A bearish drift among professionals

Pechman then invites in his article to look instead at indicators from the derivatives markets to better understand the market trend. The premium, which measures the difference between monthly futures contracts and the current spot market price, rose for the first time to a negative level of 2.5% for more than 12 hours yesterday. Such a value is indicative of a fundamentally bearish market.

The current put/call ratio, which compares traders’ use of put options to obtain the right to sell Bitcoins at a fixed price in the future, versus call options that protect their buyers against a rise in the Bitcoin price, also confirms this downward trend. This ratio exceeds 0.66, and still shows a prevalence of call options, but we also see in the chart below a strong upward trend in this indicator. Put options used to hedge against bear markets may soon take over.

Le ratio put/call issu des marchés dérivés Bitcoin montre une tendance baissièrePut/call ratio – Source: Cointrader.pro

The above mentioned indicators on the derivative markets show that the fall below $30,000 has affected the confidence of professional

traders.

The current recovery is based on weak fundamentals for the time being.

This prediction of a $13,000 Bitcoin

is still valid. The bulls need to run longer to restore a sense of euphoria and optimism in the markets.

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