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On July 1, at the beginning of the third quarter of 2024, BTC bulls strived to regain lost ground and broke through to above 63,800.
Judging from the weekly, monthly and quarterly data, BTC price strength is temporarily recovering and the $60,000 support level remains.
As of this writing, Bitcoin has gained 4% in 24 hours and certainly has a long way to go if it is to continue its bull run.
Months of consolidation have caused Bitcoin to fall below the $60,000 mark twice, and both declines are now looking more and more like bear traps. Can the bulls really win?
Going forward, traders will not only focus on $60,000 but also other important bull trend lines to feel more confident about a BTC price rebound.
Macroeconomic data this week will increase the potential for overall volatility, with a slew of U.S. unemployment data coming in addition to inflation clues from senior Fed officials.
Bitcoin miners are also in the spotlight. After weeks of hash rate “capitulation,” will the current low hash rate prevent the industry from rebounding?
As July arrives and BTC/USD recovers from what bulls hoped would be a fake crash, Cointelegraph takes a closer look at these questions.
Bitcoin faces a battle to continue its bull run
A series of spikes on the last day of June helped Bitcoin to achieve a good weekly, monthly, and quarterly close, surpassing $62,500.
The momentum subsequently continued, with BTC/USD hitting a local high of $63,724 on Bitstamp before consolidating at lower levels, according to data from Cointelegraph Markets Pro and TradingView.
Data from monitoring resource CoinGlass confirms a 7% loss in June, while Bitcoin is down 12% overall in the second quarter.
Looking ahead to the short term, market participants remain cautious and there is much room for improvement in market sentiment.
For Keith Alan, co-founder of trading resource Material Indicators, “Bitcoin has bounced off the lows, but at this point, it doesn’t look like bulls have enough momentum to close above the 21-week moving average.”
“Failure to break above this level could mean BTC tests lower again before heading back to ATH territory,” he wrote in his latest update on X (formerly Twitter).
Allen mentioned a major support line that was recently lost as support. The 21-week moving average currently sits around $64,000.
“TLDR: Save some dry powder,” he concluded.
Meanwhile, prominent trader Daan Crypto Trades noted that a huge “gap” has appeared in CME Group’s Bitcoin futures due to the weekend rally.
With prices starting at $60,400, it represents “the biggest loss in a long time,” he warned.
“1. Yes, the gap below can be closed, but as we said, the price is still far away, so don’t take it too seriously,” he wrote in part of X’s analysis.
“2. If the market wants to flee, weekend moves/gaps are the best time. Most people can only sit on the sidelines. We have seen similar gaps before, but they were never filled, or not filled until months/years later.”
Meanwhile, looking at order book liquidity, the price has seen multiple liquidity chases in July, with $64,100 now being the key area to watch.
Unemployment data in line with Fed's
The release of several unemployment data from the United States is a key catalyst for macro volatility this week.
Despite the July 4 holiday, there are still many events in the coming week that could cause unexpected volatility in the cryptocurrency market.
In addition to unemployment, a touchy subject for Bitcoin and altcoins this year, Federal Reserve Chairman Jerome Powell is set to speak at the Monetary Policy Forum in Sintra, Portugal on July 2.
A day later, the minutes of the Federal Reserve's last meeting on inflation policy will be released.
“The week ahead is short but busy,” trading resource Kobeissi Letter summed up the upcoming diary date.
Looking ahead, trading arm QCP Capital is increasingly optimistic about the broader risk asset environment this month.
“From a seasonal perspective, BTC has averaged a 9.6% return in July and tends to rebound strongly, especially after the negative growth in June (-9.85%),” the company wrote in its latest announcement to Telegram channel subscribers.
“Last Friday, our options desk also saw flows looking to move higher towards the end of the month, likely due to the upcoming launch of the ETH spot ETF. Many signs point to a bullish July.”
Key BTC price trendline stands out
So far, Bitcoin lacks momentum to break above the key $64,000 resistance level.
The significance of the area where BTC/USD has rejected so far after the monthly open is that several trend lines have merged in one place.
As Cointelegraph reported, $64,000 is the cost basis for short-term Bitcoin holders (STH), in addition to the 21-week moving average. It is also known as the realized price, reflecting the total purchase price of the tokens purchased by speculators.
Cost basis has been supportive throughout the current bull market, with the only exception being August 2023.
“If the price fails to break through a certain level quickly, it will likely become a resistance level for future prices,” SignalQuant, a contributor to on-chain analytics platform CryptoQuant, warned in its Quicktake blog post last week.
At current prices, the average debt-to-asset ratio of STH entities (i.e. entities that hold a certain amount of BTC for 155 days or less) has decreased slightly.
As a result, the market value to realized value (MVRV) metric, which compares STH holdings to the purchase price, is below the breakeven point of 1. Data from on-chain analytics firm Glassnode confirms that this is the first time it has fallen into the red since October 2023, with the exception of early May.
Is there light at the end of the tunnel for miners?
Despite a modest rebound in BTC price, network fundamentals remain in what some have described as a state of “capitulation.”
According to estimates from monitoring resource BTC.com, difficulty is still expected to drop by 5% this week as Bitcoin miners continue to adapt to the new economic reality after the halving.
As Cointelegraph reported, less efficient miners may shut down due to costs, leading to a drop in hash rate — a common phenomenon after halving events.
The Hash Ribbons metric, which compares 30-day and 60-day hash rates, shows that miners are still in the “capitulation” phase.
Still, withdrawals of MCoin from miner-linked wallets, MCoin sent to exchanges, and over-the-counter transactions have all fallen sharply over the past month, leading to renewed optimism about profitability.
CryptoQuant contributor Crypto Dan commented on this issue in a recent Quicktake post: “Selling pressure from miners has dropped significantly and their selling is being absorbed quickly.”
“Sufficient conditions have been created for continued increases into the third quarter of 2024.”
Bitcoin miners trade to exchanges, OTC desk balances (screenshot)
Crypto market sentiment clearly recovers
When it comes to overall crypto market sentiment, the quarterly close is already showing.
Related: 3 Things That Could Derail Bitcoin’s Potential Bullish Momentum in July
The latest reading of the Crypto Fear & Greed Index shows that "greed" sentiment has clearly risen over the weekend.
As of July 1, the Fear & Greed Index increased by 6 points, and as a lagging indicator, the full impact of the overall rise in cryptocurrency market capitalization may not yet be seen.
By contrast, on June 29, the index was just 30/100 – a value that not only corresponds to “fear” but, as an average sentiment score, is close to the level of “extreme fear”.
Still, during the downturn, research firm Santiment pointed to an “oversold” reading on Bitcoin’s relative strength index (RSI) as a potential harbinger of recovery.
“Bitcoin has seen a modest rebound following the drop of the past two weeks, but this rebound currently looks short-lived. But please note that the continued negativity among the crowd suggests that their patience is wearing thin,” it told X’s fans.
“This data, coupled with an RSI of just 36, strongly suggests a rebound is on the horizon.”
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Again, at this stage, we are planning some good currencies
Believe, be interested, want to witness the strength
You can leave a comment 999, free entry
