Bitcoin prices hit their lowest weekly close in four months. This week saw more volatility in the market, affected by a variety of factors including the release of US CPI and PPI data.
Last week's market review
Bitcoin [BTC] led altcoins in a sharp downtrend for much of last week, driven by seller pressure triggered by the Mt. Gox debt repayment and the German BTC sell-off. On July 6, Bitcoin broke out of the downtrend, rising from an intraday low of $53,717 on July 5 to $58,472, eventually recovering some of its losses on July 7. However, reports of continued Bitcoin selling in Germany also slowed down Bitcoin’s positive movement on July 8.
Bitcoin Technical Analysis
Double Top Formation and Moving Averages
Bitcoin’s continued decline has brought the double top pattern on the daily chart into focus. The formation of a double top usually signals a bearish reversal, indicating that the asset price may fall after failing to break through a major resistance level. The price plunge before the weekly close confirms the end of months of consolidation. On the weekly chart, Bitcoin closed below the lower Bollinger Band, suggesting that price targets may be lower.Prices moving outside of a range usually indicate a strong trend, while a contraction indicates low volatility and a possible impending breakout. Notably, Bitcoin is trading below the 50-day, 100-day, and 200-day exponential moving averages (EMA) on the 4-hour chart at press time, which is a boon for bearish speculators. To reverse this situation, bulls need to push the price above the flattened 20-day EMA on the 4-hour chart.
Daily RSI shows positive divergence
Between July 4 and 5, Bitcoin’s relative strength index (RSI) hovered below 30 on the daily chart, marking the second time in less than three weeks that the RSI has fallen into oversold territory. The RSI reading on the daily timeframe also confirmed a daily bullish divergence, suggesting that despite lower BTC prices, downward momentum may be slowing. Historically, daily bullish divergences have mostly been accompanied by trading setups close to bottoms. At press time, the daily RSI is at 36.04.
Macro narrative
Macroeconomic data such as the US Consumer Price Index (CPI) and Producer Price Index (PPI) expected to be released this week will test the resolve of cryptocurrency traders. The layout is ongoing, communication +: GOOOKOOOY welcomes everyone to actively participate and witness the moment of miracle together
Analysts at Citi Research predicted on Sunday that the Federal Reserve could cut interest rates by 200 basis points at eight consecutive meetings from September to July 2025. The rate cuts, which continue until the summer, would bring the benchmark rate to a range of 3.25%-3.5%. Lower interest rates are generally good for riskier assets such as cryptocurrencies because they reduce borrowing costs and increase liquidity, encouraging investors to seek higher returns in alternative instruments such as cryptocurrencies.
The U.S. M2 money supply, which measures the total amount of money in circulation including cash, checks, and savings deposits, has been expanding. The U.S. M2 money stock was last reported on June 25 at $20.96 trillion, up from $20.87 trillion on May 28 (April) and $20.84 trillion on April 23 (March). An increase in the M2 supply indicates increased liquidity, which could lead to higher inflation and drive investors toward alternative assets such as cryptocurrencies, potentially pushing up cryptocurrency prices.
Miner capitulation signals a possible market bottom
In June, the Bitcoin network hash rate (SMA 7-day) fell from a peak of 656 EH/s on May 27 to a four-month low of 556 EH/s on June 30. A lower hash rate (the total computing power used to mine and process transactions) typically reflects miners shutting down due to reduced profitability. Therefore, the continued decline in hash rate suggests that some miners may be scaling back operations. Sell-offs and operational cuts by mining companies have in the past signaled that prices are near cyclical lows and could soon recover.
