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Bitcoin (BTC) starts a new week nearing key resistance as the shock of the latest United States inflation data passes — can the strength continue?

The July 17 weekly close may have been practically identical to the last, but BTC/USD is showing some much needed strength prior to the July 18 Wall Street open.

Last week was a testing time for crypto hodlers everywhere, with inflation dictating the mood across risk assets and the U.S. dollar capping the gloomy atmosphere. With those pressures now easing — at least temporarily — the mood has room to relax.

At the same time, on-chain data suggests that now is a make or break moment for Bitcoin miners, and capitulation across the market feels close.

As talk over where Bitcoin’s macro bottom could lie continues, Cointelegraph takes a look at several factors primed to shape BTC price performance in the coming days.

Bitcoin (BTC) starts a new week nearing key resistance as the shock of the latest United States inflation data passes — can the strength continue?

The July 17 weekly close may have been practically identical to the last, but BTC/USD is showing some much-needed strength prior to the July 18 Wall Street open.

Last week was a testing time for crypto hodlers everywhere, with inflation dictating the mood across risk assets and the U.S. dollar capping the gloomy atmosphere. With those pressures now easing — at least temporarily — the mood has room to relax.

At the same time, on-chain data suggests that now is a make-or-break moment for Bitcoin miners, and capitulation across the market feels close.

As talk over where Bitcoin’s macro bottom could lie continues, Cointelegraph takes a look at several factors primed to shape BTC price performance in the coming days.

The year 2022 saw not only drastic dips in leading cryptocurrencies and financial markets in general but also major legislative frameworks for crypto in prominent jurisdictions. And while the “crypto bill,” co-sponsored by United States senators Cynthia Lummis and Kirsten Gillibrand, still has a long way to go, its European counterpart, the Markets in Crypto-Assets (MiCA), had finally made it through Tripartite negotiations. 

On June 30, Stefan Berger, European Parliament member and rapporteur for the MiCA regulation, revealed that a “balanced” deal had been struck, which has made the European Union the first continent with crypto-asset regulation. Is the deal really that “balanced,” and how could it affect crypto at large and some of its most important sectors in particular?

No direct ban, but tighter scrutiny

The industry met the latest MiCA draft with a mixed response — the cautious optimism of some experts was counterweighted by the diagnosis of “unworkability” on Twitter. While the package dropped one of its most alarming sections, a de facto prohibition of the proof-of-work (PoW) mining, it still contains a number of controversial guidelines, especially regarding stablecoins. 

Ironically, in its assessment of the risks posed by stablecoins to the economic system, the European Commission has chosen a combination of “moderate” options, reserving from the outright ban, which is labeled in the document as Option 3:

“Option 3 would not be consistent with the objectives set at the EU level to promote innovation in the financial sector. Furthermore, Option 3 could leave some financial stability risks unaddressed, should EU consumers widely use ‘stablecoins’ issued in third countries.”

A July 9 post by @PricedinBTC on the "cost to mine Bitcoin" in the United States gathered the crypto community's attention, especially considering the recent headlines that BTC miners have made. The crypto bear market and growing energy costs have caused a perfect storm for the mining sector and this has led some companies to lay off employees and others to defer all capital expenditures. Some went as far as raising concerns of Bitcoin miners hitting a “death spiral.”

However, Raymond Nasser, the CEO of Arthur Mining, a professional mining company operating in the United States told Cointelegraph that their margins don't full concur with the data from @PricedinBTC.

Arthur Mining's current capacity is 25 megawatts (MW) and the company focuses on environmentally friendly energy sources. At first, one could dismiss their numbers as listed companies like Marathon Digital Holdings have 300 MW plants, but these rely on the traditional grid energy — even if a portion of the power originates from hydro-electric plants.

To achieve the best environmental, social and governance (ESG) practices, the smaller scale mining operations utilize undervalued flare and stranded gas from the oil and gas industry. Their secret is mobile Bitcoin mining facilities, tapping greener, more efficient and more profitable energy sources compared to traditional solutions.

Regarding the $16,000 production cost for miners, Nasser said:

The United States equities markets recovered from their intra-week lows last week, suggesting demand exists at lower levels. On similar lines, Bitcoin (BTC) also recovered from $18,910 last week, indicating that traders may be getting back into risky assets. 

However, analysts remain divided in their opinion on the recovery in Bitcoin. While some believe that the relief rally is a bull trap, others expect the up-move to retest the crucial resistance at the 200-week moving average ($22,626).

The current bear phase has damaged sentiment as seen from the Crypto Fear and Greed Index, which has remained in the “extreme fear” zone since May 6. According to Philip Swift, creator of on-chain analytics platform LookIntoBitcoin, the time spent in the “extreme fear” category is longer than during the 2018 Bitcoin bear market.

Could the sentiment stage a turn around boosting crypto prices higher? Let’s study the charts of the top-5 cryptocurrencies to identify potential breakout assests.

BTC/USDT

Bitcoin rose above the 20-day exponential moving average ($20,894) on July 15, but the bulls have not been able to build upon this advantage. The bears are likely to defend the resistance line of the symmetrical triangle with vigor.