Bitcoin Weekly Forecast: Signs of weakness persist

• Marathon Digital (MARA) added 4,141 BTC worth $249 million this week.
• On Tuesday and Wednesday, Mt. Gox and the US government fund transfer create FUD among traders.
• On-chain data shows negative bias, signaling a bearish move for BTC ahead.

 

Bitcoin (BTC) trades above $58,000 on Friday after after testing and failing to overcome the resistance level around $62,000 earlier in the week. The risk-on mood returned to markets this week, Marathon Digital added 4,141 BTC worth $249 million to its holdings and the US SEC approved a MicroStrategy leveraged ETF, potentially giving investors more exposure to Bitcoin. 

 

Still, Bitcoin failed to benefit from these news, as Mt. Gox and the US government fund transfers created FUD among traders. As Bitcoin price looks set to close the working week broadly stable, on-chain data shows the negative bias persists, signaling a bearish move for BTC in the upcoming days.

 

Marathon Digital buys more BTC 

Arkham Intelligence and Lookonchain data show that the token balance of the wallet from Marathon Digital (MARA), one of the largest Bitcoin miners, has increased from 15,000 to 19,000 BTC this week. The token balance history shows that MARA holdings have increased from $891 million to $1.12 billion this week until Friday.

 

This purchase indicates that institutional investors like MARA see potential in Bitcoin as a long-term investment opportunity.

MARA BTC Holdings chart

MARA BTC Token Balance History

Additionally, per the Nasdaq regulation update, the US Securities & Exchange Commission (SEC) approved Defiance’s Daily Target 1.75X Long Microstrategy ETF MSTR, a leveraged ETF. This allows the investors to seek daily leveraged investment returns of 1.75 times the daily percentage change of the stock.As Microstrategy is a big holder of Bitcoin, the new investment product has the potential to give traders more indirect access to the main crypto.

 

US government, Mt.Gox funds transfers raise concerns 

 

Arkham Intelligence data shows that on Wednesday, a wallet associated with the US government transferred 10,000 BTC, worth $593.5 million, to Coinbase Prime. These funds were related to Silk Road Confiscated Funds by the US Department of Justice (DOJ).

 

Additionally, Mt. Gox wallets showed fund movement on Tuesday, with a wallet that previously received $2.19 billion in Bitcoin from Mt. Gox now initiating test transactions.

This wallet, identified as bc1q26, is likely Bitgo, the final exchange collaborating with the Mt. Gox Trustee to distribute funds to creditors. According to Arkham, the move could be related to the distribution of funds to Mt.Gox creditors. 

These activities could generate FUD (Fear, Uncertainty, Doubt) among traders, potentially contributing to the downward pressure for Bitcoin's price this week.

 

 

Bitcoin on-chain data shows negative bias

CryptoQuant Binance funding rates chart is crucial for gauging future market sentiment. A sharp decline indicates aggressive short selling and the liquidation of long positions. 

 

Bitcoin's funding rates on Binance have been negative for the third consecutive day, reaching levels not seen since October 2023. Negative funding rates reflect bearish sentiment and short seller dominance, which suggests that short traders are willing to pay long traders. This could indicate a bearish market sentiment in the short term.

Bitcoin Funding rates Binance chart

 

Additionally, the Net Unrealized Profit and Loss (NUPL) indicates the total profit or loss in all the coins, represented as a ratio. The 0.4 level has historically served as a significant support and resistance point. 

 

Currently, NUPL stands at 0.45, and data shows that a breach below this level often marks the onset of a substantial downward trend. If the index continues its downward movement, it's reasonable to anticipate that the bears could take full control of the market. Such a scenario could lead to a further decline in Bitcoin's price. 

Bitcoin NUPL chart

Institutional flows weren’t supporting Bitcoin price this week, either. According to Coinglass data, US spot Bitcoin ETFs experienced three days of slight inflows and one day of outflows this week until Thursday, totaling $3.5 million in net outflows. Net flows can help gauge investors sentiment towards Bitcoin, but when these are small – like this week so far – they are less significant considering that the total Bitcoin reserves held by the 11 US spot Bitcoin ETFs are at $53.74 billion.

Bitcoin Spot ETF Netflow chart

 

BTC finds rejection around $62,000 level

Bitcoin price retested $62,066 on Tuesday, which aligns with the 61.8% Fibonacci retracement level drawn from the swing high of $70,079 on July 29 to the low of $49,101 on August 5. BTC was rejected and declined by 5% in the following two days. As of Friday, it trades slightly higher by 1% at $58,231.

 

If BTC continues to face resistance at the $62,066 level, it could crash 14% from its current trading level at $58,231 to retest its daily support at $49,917.

 

On the daily chart, the Relative Strength Index (RSI) and Awesome Oscillator (AO) trade below their neutral levels of 50 and zero, respectively, giving more credence to the bearish outlook.

BTC/USDT daily chart

However, if Bitcoin's price can close above the August 2 high of $65,596, it would set a higher high on the daily chart, possibly leading to a 6% price increase and testing the weekly resistance at $69,648.