Cryptocurrencies

Starting the last week of June, Bitcoin is heading for a new test

Starting the last week of June, Bitcoin is heading towards a retest of the lower range as Bitcoin price action approaches $60,000.

After falling another 1.25% since the daily close on June 24, Bitcoin (BTC) continues to test the nerves of bulls with a deeper trip into key resistance.

The key question in the coming days, as we approach the monthly close, is whether or not this will continue.

To get to this point, Bitcoin has already abandoned several moving averages and plunged short-term holders into the red by falling below its total cost basis.

As a result, demand is experiencing a temporary slowdown and the focus is particularly on whales, amid the lowest prices in over a month.

The release of classic US unemployment data on June 28, along with revised second-quarter GDP figures, which were followed the next day by a “preferred” inflation measure from the US Federal Reserve, fueled the volatility this week. .

Thus, Bitcoin action is stuck if the recovery begins before the monthly and quarterly close, with BTC/USD down 7% in June so far.

Cointelegraph takes a look at the current BTC price landscape and investigates the key issues traders are facing in what already appears to be a big week for the market.

BTC price hits six-week low

Bitcoin disappointed after its latest weekly close, falling steadily to $62,128 on Bitstamp, data from Cointelegraph Markets Pro and TradingView confirmed.

BTC/USD daily chart. Source: Commercial View

These are the lowest levels since May 15, and with weekly and quarterly closes expected in the coming days, bulls now face month-to-date losses of 7%.

“BTC looks weaker than expected and expected to see more declines,” popular crypto trader Ed wrote in part of his recent article on X, capturing the mood.

Crypto Ed added that altcoins, which are already suffering from falling Bitcoin prices, could see an additional 20% drop.

Total altcoin market capitalization on a 1-day chart. Source: Commercial View

Meanwhile, another trader, Daan Crypto Trades, identified key levels in Bitcoin’s multi-month trading range.

“It has reached the Fibonacci retracement level of the golden pocket. “If there are any bulls who want to turn this into a higher low, this is the place,” he warned that day.

“A bounce should trigger a retest of the mid-range, while failure to do so will likely trigger a retest of the low-end.”

BTC/USDT performance chart. Source: Dan Crypto Trades

Data from monitoring resource CoinGlass showed that the BTC/USD price reduced bid support by over $62,000. She confirmed that in the last 24 hours, approximately $48 million worth of Bitcoin purchases were liquidated.

BTC liquidation heatmap (screenshot). Source: Coinglass

PCE Week Arrives with Traders Focusing on Fed Liquidity

The whirlwind of macroeconomic data is expected to return in the second half of the week, with the release of U.S. jobless claims, revised second-quarter GDP and the May edition of the Personal Consumption Expenditures Index ( PCE).

Cryptocurrency markets have proven sensitive to unemployment data, particularly in 2024, while personal consumption expenditures are known to be the Fed’s “preferred” measure for tracking inflation progress.

This, in turn, could have a significant impact on the policy if it fails to meet expectations one way or the other.

“There are a lot of important data to conclude the second quarter of 2024 this week,” summarized business source The Kobeissi Letter on X.

Al Qubaisi added that personal consumption spending will help keep the market away from fears of “stagflation”.

Matthew Dixon, founder and CEO of cryptocurrency rating platform Evai, was among the crypto market watchers who predicted the indicator would put the cat among the pigeons with a curve reading.

“The market awaits the #PCE on Friday the 28th. “The Fed prefers an inflation measure,” he told X subscribers on June 24.

“I expect a lower than expected reading, which would send #BTC #Crypto #Altcoins and other risk assets higher.”

Fed target interest rate outlook for September meeting. Source: CME Group

The latest estimates from CME Group’s FedWatch tool show that markets still see the Fed starting to cut interest rates – a key timing for cryptocurrencies and risk assets – in September, rather than earlier.

Stocks leave cryptocurrencies in the dust

Strange paradox, the weakness of Bitcoin and cryptocurrencies comes at a time when American stocks are outperforming.

The S&P 500 reached all-time highs last week, highlighting an inverse correlation with Bitcoin that surprised many.

“Short interest on the S&P 500, $SPY, Nasdaq 100, $QQQ and ETFs has now reached 6-year lows,” Kobeissi noted.

“Since 2023, short interest as a percentage of shares outstanding has decreased by more than 50%. Meanwhile, the volatility index, the $VIX, is down 40% since January 2023. Even during the fastest interest rate hike cycle on record, volatility is trading near its highest. record lows.

Kobesi thus concluded that “the market’s appetite for risk has never been stronger,” which makes the poor performance of cryptocurrencies even more surprising.

S&P 500 versus total cryptocurrency market cap. Source: Commercial View

Offering an explanation, market commentator Thomas suggested that Bitcoin remains highly sensitive to Fed liquidity levels, which fell by $140 billion last week.

“Fed net liquidity fell 2.21% this week, while Bitcoin fell 4.77%. “Stocks are also down slightly, with the S&P and Nasdaq down almost 1% in 24 hours,” he wrote in a June 21 X article.

Thomas noted that liquidity levels were at or near local lows, although uncertain, implying that a recovery would improve crypto performance across the board.

“These things are always difficult to predict, but if I were to estimate the rough direction of the Fed’s net liquidity in the coming weeks/months, I would say that where it will likely be now is at the low point or close to the low point, with a net increase in federal liquidity.

Previously, a deeper analysis of the Fed’s liquidity correlation in Bitcoin concluded that the uptrend could return with the monthly close.

Bitcoin whales under the microscope

As Bitcoin heads towards the $60,000 level, some are wondering if current levels represent an attractive trade for the number of whales.

In recent weeks, order book “spoofing” has repeatedly pushed prices towards liquidity, leading to artificial volatility.

Although data shows that certain classes of whales are increasing their exposure to Bitcoin this quarter, the situation is not uniform, Cointelegraph reported.

As popular Bitcoin social media commentator Munger pointed out last week, the largest class of whales contrasts with the others in their tendency to accumulate.

Bitcoin whale accumulation trend data. Source: Bitcoin Monger

But this week, confidence is growing in the whales’ widespread $62,000 accumulation.

Commentator Marty Bartee said: “It is clear that whales bought this dip in record numbers – but the volume of sales does not justify the price cuts manipulated by market makers, who work for the whales. »

Bitcoin whale order data. Source: Marty Day

The attached chart from CoinGlass shows recent whale orders on the Binance BTC/USDT perpetual trading pair.

Data from on-chain analytics platform CryptoQuant, meanwhile, shows a slight increase in flows to accumulator addresses from June 20.

BTC circulates to the accumulator addresses. Source: Cryptoquant

Cryptocurrency sentiment closes at 2024 low

At 51/100 as of June 24, the cryptocurrency fear and greed index is close to its 2024 lows.

Related: Bitcoin Price Loses Ground as TON, PEPE, KAS and JASMY Grab Trader Attention

The relatively small decline in market capitalization in percentage terms speaks volumes from a sentiment perspective.

Here, the indicator, which just a week ago was approaching “extreme greed,” is now flirting with “fear” territory.

Cryptocurrency Fear and Greed Index (screenshot). Source: Al-Badil.me

Even when its price was still around $65,000, research firm Santiment noted what it called a “rare” situation causing concern among Bitcoin market participants.

“The public is basically afraid or uninterested in Bitcoin because prices range between $65,000 and $66,000. This extensive level of FUD is rare, as traders continue to drop out,” commented X on June 20.

“Bitcoin trader fatigue, combined with whale accumulation, usually leads to patiently rewarded bounces.”

Bitcoin sentiment data. Source: Santiment

This extremely bad mood was not lost on long-time traders, with Gilley describing it as “getting worse by the day.”

“The chop seems to be doing exactly what it’s supposed to do: getting rid of as many people as possible, before triggering the HUD. We saw the same thing in previous sessions. “This time is no different,” X’s post read.

A colleague from the IncomeSharks trading account argued that the bad climate was the result of trading based on emotion.

“Sentiment is very low because people were trading too much in tough conditions and losing money,” the report concludes.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making a decision.

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