Bitcoin (BTC) is starting the third quarter of 2024 with a bang as it aims to regain lost ground on its way to all-time highs.
BTC price strength is tentatively recovering as the combined weekly, monthly, and quarterly price remains at $60,000.
With a 4% gain in the past 24 hours as of this writing, Bitcoin has definitely had its work cut out for it to continue its bullish run.
After months of consolidation, it has now dropped below the $60,000 mark twice, both times looking like bear traps. Can the bulls really win?
Going forward, traders will look to $60,000 as well as other important bull market trendlines to gain more confidence in a BTC price rebound.
Macroeconomic data this week is expected to be more volatile overall, with a range of U.S. unemployment data coming out in addition to inflation signals from top Federal Reserve officials.
Bitcoin miners are also interested. After weeks of hash rate “capitulation,” will the current low hash price prevent the industry from rebounding?
Cointelegraph takes a closer look at these and other issues as BTC/USD recovers from a price slump that was believed to be a fake crash at the start of July.
Bitcoin faces a battle to continue its bull market.
A series of surges in the last days of June helped Bitcoin secure promising weekly, monthly and quarterly closes above $62,500.
BTC/USD subsequently fell, hitting a local high of $63,724 on Bitstamp, according to data from Cointelegraph Markets Pro and TradingView.
According to figures from monitoring resource CoinGlass, a 7% loss was confirmed in June, with Bitcoin ending the second quarter down a total of 12%.
Looking to the near future, market participants remain cautious and much remains to be recovered for sentiment to improve.
“Bitcoin has had a nice rally off the lows, but it doesn’t seem to have the momentum to close above its 21-week moving average at the moment,” said Keith Alan, co-founder of trading resource Material Indicators.
“If it fails to break above that, BTC may have to retest the lows again before returning to the ATH zone,” he wrote in part of his latest update on X (formerly Twitter).
Alan mentioned one of the important support levels that was recently lost as support. The 21-week moving average is currently sitting around $64,000.
“TLDR: Save some dry powder,” he summarized.
Popular trader Daan Crypto Trades notes that a large “gap” has occurred in CME Group Bitcoin futures thanks to the weekend rally.
Starting at $60,400, the sum now represents “the biggest we’ve had for a long time,” he warns.
“One. Yes, the gap below may close, but prices are pretty far off as we speak, so don’t estimate too much.” He wrote part of his analysis of X:
“2. If the market wants to run away, this weekend’s move/gap is the perfect time to do so. Leaves most of the sideways. We have seen such gaps created previously that do not resolve or end after months or years.”
Meanwhile, a look at order book liquidity shows that the price is gearing up for several liquidity hunts through July, with $64,100 currently being the main area of concern overhead.
Unemployment Meets Fed Powell
Several U.S. unemployment data releases were key factors driving macroeconomic volatility this week.
Despite the Fourth of July holiday, there is no shortage of events that could trigger unexpected moves in the cryptocurrency markets next week.
Aside from unemployment (a sensitive topic this year for Bitcoin and altcoins), Federal Reserve Chair Jerome Powell is scheduled to speak at the Monetary Policy Forum in Sintra, Portugal on July 2.
A day later, minutes of the Fed’s previous meeting on inflation policy issues are released.
“A short but very busy week awaits us,” trade resource Kobeissi Letter summarizes the upcoming diary dates.
Looking ahead, trading desk QCP Capital is increasingly optimistic about the overall risk asset environment this month.
Looking at seasonality, BTC’s average return in July is 9.6%, and it tends to bounce back particularly strongly after a negative June (-9.85%).
“Our options desk identified a potential bullish trend last Friday towards the end of the month, possibly in anticipation of the launch of the ETH spot ETF. “Many signs are pointing to a strong July.”
Major BTC price trend lines stand out
So far, Bitcoin lacks momentum to overcome resistance near the $64,000 level.
The significance of the area that BTC/USD has so far rejected since the monthly open is because it brings together several trend lines in one place.
As Cointelegraph reported, in addition to the 21-week moving average, $64,000 is the site of the Bitcoin short-term holder (STH) cost basis. Also called realized price, it reflects the total purchase price of coins acquired by speculators.
Cost basis has acted as support throughout the bull market so far, with the only exception being August 2023.
SignalQuant, a contributor to the on-chain analytics platform CryptoQuant, warned in one of his Quicktake blog posts last week that “if price does not move quickly above the first price level, there is a high chance that it will turn into a resistance level in the future.”
STH companies that have held a certain amount of BTC for less than 155 days are slightly down on average at current prices.
As such, the market value to realizable value (MVRV) metric, which compares STH stakes to the purchase price, is below the break-even point of 1. This is the first time since October 2023 that it has been in the red, excluding early May. According to data from on-chain analytics firm Glassnode,
Light at the end of the tunnel for miners?
Despite a moderate BTC price bounce, network fundamentals remain in a state that some are describing as a “capitulation.”
Difficulty is expected to drop by another 5% this week, according to estimates from monitoring resource BTC.com, as Bitcoin miners continue to adjust to the new economic reality following the halving.
As Cointelegraph reported, less efficient miners are likely to stop mining due to cost concerns, which causes hash rates to drop. This is a common phenomenon after half-life.
The hash ribbon metric, which compares the 30-day hash rate to the 60-day hash rate, shows a “surrender” phase among miners still in the field.
Nonetheless, withdrawals from miner-related wallets, miner coins sent to exchanges, and OTC transactions have all declined sharply over the past month, raising optimism about the profitability situation again.
“Selling pressure from miners has decreased significantly and sales are being digested quickly,” CryptoQuant contributor Crypto Dan said in a recent Quicktake post on the matter.
“There are sufficient conditions for the rally to resume in the third quarter of 2024.”
Cryptocurrency market sentiment has clearly recovered
The quarter close is already having an impact on overall cryptocurrency market sentiment.
Related: 3 Things That Could Destroy Bitcoin’s July Strong Month
The latest figures from the Crypto Fear & Greed Index already show an uptick in ‘greed’ over the weekend.
Fear and Greed had increased by 6 points by July 1, and as a lagging indicator, the full impact of the recent increase in cryptocurrency market capitalization is likely not yet noticeable.
By comparison, the index on June 29 was just 30/100, which is not only “fearful,” but also knocks on the door of “extreme fear” as an average sentiment score.
Despite the lows, research firm Santiment cited an “oversold” reading on Bitcoin’s Relative Strength Index (RSI) as a potential leading signal for a recovery.
“Bitcoin’s modest rebound after the last two weeks of bull market volatility is short-lived for now, but the continued negativity coming from the crowd suggests their patience is wearing thin,” he told X followers.
“This is a strong signal that a bounce is near, along with the low RSI of just 36.”
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