Bitcoin (BTC) has kicked off the third quarter of 2024 with a strong start as bulls attempt to regain lost ground and push the price to all-time highs. The price of BTC is showing signs of strength as it holds the $60,000 support level on a weekly, monthly, and quarterly basis. Despite a 4% gain in the past 24 hours, Bitcoin still faces challenges in sustaining its bullish momentum. After months of consolidation, the recent dips below $60,000 are beginning to look like bear traps, but it remains to be seen if the bulls can come out on top. Traders will be closely watching other important trendlines in the bull market to gain more confidence in a price rebound. In addition, macroeconomic data and statements from Federal Reserve officials will contribute to the overall volatility of the market this week. Bitcoin miners are also being closely monitored as the industry tries to recover from a period of low hash rates. As BTC/USD recovers from a potential breakdown, Cointelegraph analyzes these factors and more in the context of Bitcoin’s performance in July.
Bitcoin’s recent spikes in price in June helped it close the week, month, and quarter above $62,500. Although BTC/USD reached local highs of $63,724 on Bitstamp, it has since consolidated lower. Despite a 7% loss in June and a total Q2 loss of 12%, market participants remain cautious as there is still a long way to go for sentiment to improve. Key support and resistance levels will play a crucial role in determining Bitcoin’s future price movements. The 21-week moving average, currently around $64,000, has become an important support line. If BTC fails to move above this level, it could turn into a resistance level, potentially leading to a retest of the lows before reaching all-time highs again. Traders are also paying attention to the “gap” in CME Group Bitcoin futures, which could affect price movements. Order book liquidity shows that $64,100 is a key area of interest overhead.
The upcoming week is filled with macro volatility catalysts, including several U.S. unemployment data releases and a speech by Federal Reserve Chair Jerome Powell. These events have the potential to trigger unexpected movements in the crypto market. Despite the shorter week due to the July 4 holiday, market participants are expecting a busy week. Trading desk QCP Capital is optimistic about the broader risk-asset climate in July, citing historical data that shows Bitcoin tends to bounce back strongly after a negative June. However, Bitcoin is currently struggling to break through the important resistance level at $64,000. This level is significant because it brings together various trendlines and the short-term holder (STH) cost basis. If BTC fails to move above the STH price quickly, it could become a resistance level going forward. On-chain analytics show that STH entities are currently modestly underwater, and the MVRV metric is below the breakeven point of 1, indicating a loss-making territory.
While Bitcoin has experienced a moderate rebound in price, network fundamentals are still in a state of “capitulation.” Difficulty is expected to drop by 5% this week as less efficient miners shut off due to costs. This has led to a decrease in hash rate, as seen in the Hash Ribbons metric. However, there are signs of optimism as withdrawals from miner-affiliated wallets, miner coins sent to exchanges, and OTC transactions have sharply decreased in the past month, indicating a decrease in selling pressure from miners. This has led to renewed hope for improved profitability conditions. Overall market sentiment in the crypto market has also improved with the quarterly close, as shown by the Crypto Fear & Greed Index. The index has shifted towards “greed” from “fear” in recent days, indicating growing optimism among market participants.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research before making any investment decisions.