Bitcoin (BTC) is in the thick of things as it heads into the June close, holding on to the crucial $60,000 support level while posting monthly losses.
Unfortunately for investors in the bull market, BTC/USD may be headed for even more rough waters with a series of bearish indicators pointing to increased selling pressure in July.
Mt. Gox Unlocks $9 Billion in Bitcoin
One of the most significant declines in the cryptocurrency markets in June was related to the long-awaited Mt. Gox redemption.
Mt., once the largest Bitcoin exchange. Gox plans to repay creditors 140,000 BTC, worth about $9 billion, starting in early July 2024. This repayment comes after a decade of waiting after the exchange collapsed in 2014, resulting in the loss of more than 850,000 BTC.
There have been concerns that the impending distribution will create selling pressure in the market, with analysts predicting a significant decline in the Bitcoin price as creditors are likely to sell the assets they received to realize their profits, given the 16,000% increase in the Bitcoin price since the hack.
For example, JPMorgan analysts led by Nikolaos Panigirtzoglou point out that the recent actions of Gemini’s creditors, who may have liquidated some of the $2.18 billion in Bitcoin following Gemini’s May 29 announcement, support this bearish argument. .
For example, analyst Degen Kid is optimistic about the overall market outlook, but says the July Mt. We expect the Bitcoin price to fall to $55,000 due to Gox redemption.
On-chain metrics detect increased profit taking.
A significant number of Bitcoin investors are expecting the market to peak and stand to profit from current price levels.
For example, the 30-day average of Bitcoin’s Adjusted Spent Output Profit Ratio (aSOPR), which measures the overall profit or loss of a Bitcoin transaction, has increased from 1 to 1.03 since May.
A reading above 1 indicates that more investors are selling at a profit and is consistent with past market high formations, as shown below.
Another on-chain metric, Net Unrealized Profits and Losses (NUPL), indicates potential upside potential among Bitcoin buyers. NUPL is calculated as the difference between market cap and realized cap divided by market cap, representing the total profit and loss of all coins as a percentage.
This means that when the Bitcoin NUPL number is above 0, investors are making profits, and an increasing trend in value means that more investors are starting to make profits. This number usually precedes a market correction, and Bitcoin’s 30-day average NUPL is nearing 0.54 on June 30, suggesting the same for Bitcoin.
BTC Price Rally Breakdown Hints at $56K
Meanwhile, the 4-hour Bitcoin chart is plotting a possible breakdown of the bull pennant, a pattern that occurs when the price consolidates inside a triangle-shaped pattern after a strong downtrend.
This error is resolved when the price breaks clearly below the lower trend line and falls to a level equal to the high of the previous uptrend.
Applying the same technical rules to Bitcoin’s 4-hour (4H) chart, the cryptocurrency’s lowest price target for July would be around $56,000, which would be the maximum pain scenario.
Related: Bitcoin Price Gets ‘Interesting’ as Triple Candle Closes $61.5K in Gains
Conversely, this bearish outlook could be avoided if the price breaks above the 50-4H exponential moving average (50-4H EMA; red wave) around $61,925. This bullish reversal scenario places BTC’s July upside target at around the 200-4H EMA (blue wave) or $64,770.
This article does not contain any investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making decisions.