Bitcoin is headed for a retest of the lower range that began in the last week of June, with BTC price nearing $60,000.
Bitcoin (BTC), which is down another 1.25% since its daily close on June 24, continues to test bullish nerves as it moves deeper into key resistance levels.
Whether this holds true is now a key question in the coming days as the monthly deadline approaches.
To achieve this, Bitcoin has already abandoned several moving averages and moved below the total cost basis, putting short-term holders in the red.
Demand is therefore experiencing a temporary disruption, with particular focus on whales, which are at their lowest prices in more than a month.
Factors adding to volatility this week include the typical US unemployment rate release and revised second quarter gross domestic product (GDP) data released on June 28, and the Federal Reserve’s preferred inflation measure a day later.
So Bitcoin has its work cut out for it if it starts to rally before the monthly and quarter closes, with BTC/USD currently down 7% in June.
Cointelegraph takes a look at the current BTC price situation and examines key concerns among traders in what is already expected to be a significant week for the market.
BTC price hits 6-week low.
Bitcoin disappointed after its latest weekly close, falling steadily on Bitstamp to $62,128, according to data from Cointelegraph Markets Pro and TradingView.
This represents the lowest level since May 15, and bulls are currently sitting on a 7% monthly loss as the week and quarter closes ahead.
Popular trader Crypto Ed captured the mood in part of a recent post on
Crypto Ed added that the altcoin, which is already suffering from the BTC price slump, could fall another 20%.
Fellow trader Daan Crypto Trades set a key level within Bitcoin’s multi-month trading range.
“The golden pocket Fibonacci retracement level has been reached. “If there are any bulls left wanting to make this a higher low, this is the place to be,” he warned that day.
“The bounce should lead to a mid-range retest, otherwise a low-range retest is likely to occur.”
BTC/USD has broken off bid support above $62,000, according to data from monitoring resource CoinGlass. Approximately $48 million worth of BTC purchases were confirmed to have been liquidated in the last 24 hours.
PCE week is upon us as traders focus on Fed liquidity.
A whirlwind of macroeconomic data is expected to return later this week, with US unemployment claims, revised second quarter GDP and May personal consumption expenditures (PCE) indices all released.
Cryptocurrency markets have proven particularly sensitive to 2024 unemployment data, and PCE is said to be the Federal Reserve’s “preferred” indicator for charting the progress of inflation.
In turn, this could have significant policy implications if forecasts are significantly off in either direction.
“Lots of important data to close the second quarter of 2024 this week,” trade resource The Kobeissi Letter summarized in X.
Kobeissi added that PCE has a responsibility to lead the market away from fears of “stagflation”.
Matthew Dixon, founder and CEO of cryptocurrency valuation platform Evai, was among the cryptocurrency market observers who predicted that the index would put the cat among the pigeons with its curveball reading.
“The market awaits #PCE this Friday the 28th. #FED prefers to measure inflation,” he told X subscribers on June 24.
“I expect a lower-than-expected reading that should push #BTC #Crypto #Altcoins and other risk assets higher.”
According to the latest estimates from CME Group’s FedWatch tool, markets see the Federal Reserve starting to cut interest rates in September, a key moment for cryptocurrencies and risk assets.
Stocks leave cryptocurrencies in the dust
Interestingly, weakness in Bitcoin and cryptocurrencies occurs when US stocks are performing well.
The S&P 500 hit an all-time high last week, highlighting its inverse correlation with Bitcoin that caught many people off guard.
“Short interest on the S&P 500 ($SPY) and Nasdaq 100 ($QQQ) ETFs is at a six-year low,” Kobeissi said.
“Since 2023, short interest relative to shares outstanding has declined by more than 50%. Meanwhile, the volatility index $VIX has fallen 40% since January 2023. “Even during the fastest rate increase cycle on record, volatility remains near record lows.”
Kobeissi therefore concluded that “market risk appetite has never been stronger,” making the weak performance of cryptocurrencies even more noticeable.
Providing an explanation, market commentator Tomas suggested that Bitcoin continues to be very sensitive to the Fed’s liquidity levels, down $140 billion last week.
“Net Fed liquidity fell 2.21% this week, while Bitcoin fell 4.77%. Now stocks are also down slightly, with the S&P and Nasdaq down about 1% in 24 hours,” he wrote in an X post on June 21.
Tomas suggested, although he wasn’t certain, that liquidity levels are at or near regional lows, meaning a rebound should improve the cryptocurrency’s performance overall.
“These things are always difficult to predict, but if I had to estimate the rough direction of Net Fed liquidity over the next few weeks/months, I would say there’s a good chance that where we are right now is at or near the bottom. “As Net Fed liquidity rises,” he predicted.
Earlier, further analysis of Bitcoin’s Fed liquidity correlation concluded that the bullish trend could return with the monthly close.
Bitcoin Whale Under a Microscope
As Bitcoin heads toward $60,000, some are asking whether current levels could be an attractive deal for whale populations.
In recent weeks, there have been several instances of order book “spoofing” pushing prices toward liquidity and creating artificial volatility.
Data shows that there are some classes of whales seeing increased BTC exposure this quarter, but the picture is not uniform, Cointelegraph reported.
As prominent social media commentator Bitcoin Munger noted last week, the largest class of whales stands out against the rest in their accumulation trends.
However, this week confidence in the broad whale accumulation is increasing towards $62,000.
“It’s clear that whales have been buying the dip in record numbers,” said fellow commentator MartyParty. “But sales volumes do not justify the price reductions manipulated by market makers working for the whales,” he argued.
The attached chart from CoinGlass shows recent whale orders for the Binance BTC/USDT perpetual swap pair.
Meanwhile, data from on-chain analytics platform CryptoQuant shows an increase in cumulative address inflows starting June 20th.
Cryptocurrency sentiment closes at 2024 low
As of June 24, the cryptocurrency fear and greed index is 51/100, approaching its lowest level in 2024.
Related: Bitcoin price falls as TON, PEPE, KAS and JASMY attract traders’ attention.
A relatively small decline in market capitalization is significant from a sentiment perspective.
Here, the index, which was close to ‘extreme greed’ just a week ago, is now aiming for ‘fear’ territory.
Still at around $65,000, research firm Santiment noted a “rare” environment of fear-mongering among Bitcoin market participants.
“The crowd is mainly fearful or indifferent about Bitcoin because the price is between $65,000 and $66,000. “These extended levels of FUD are rare as traders continue to capitulate,” he commented on X on June 20.
“BTC trader fatigue combined with whale accumulation usually leads to a bounce that rewards the patient.”
The overly sour mood was not lost on long-time traders, with Jelle describing it as “getting worse by the day.”
“Chop seems to be doing exactly what it is supposed to do. The idea is to kick out as many people as possible before ATH takes effect. We saw the same thing in previous cycles. “This time is no different.” A portion of X’s post was read.
Fellow trading account IncomeSharks claimed the poor climate was a result of emotional trading.
“Sentiment is so low because people are losing money and overtrading in difficult circumstances,” he concluded.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.