3 things that could ruin July for Bitcoin
Bitcoin (BTC) is stuck at the June closing peak with monthly losses and the crucial $60,000 support level.
Unfortunately for the bulls, the BTC/USD pair could be headed for rough waters with a series of bearish indicators indicating increased selling pressure in July.
Mt. Gox is launching $9B in Bitcoin.
One of the most significant bearish events in the cryptocurrency market in June was the long-awaited Mt. Gox is related to fees.
Mt. Gox, once the largest Bitcoin exchange, will pay creditors 140,000 BTC worth 9 billion dollars from the beginning of July 2024. This payment follows a ten-year wait in 2014, when the exchange's failure resulted in the loss of more than 850,000 BTC. .
The impending distribution has raised concerns about increased selling pressure in the market, with analysts predicting a sharp drop in Bitcoin's price due to the ability of creditors to sell their assets, particularly after Bitcoin's 16,000% price appreciation since the hack.
For example, JPMorgan analysts, led by Nikolaos Panigirtzoglou, have suggested that the behavior of Gemini lenders' recent withdrawal of $2.18 billion in bitcoin following the May 29 announcement supports this bearish argument.
For example, the analyst Degen Kid said in July that Mt. Gox estimates that the price of Bitcoin will drop to $55,000 between payments, although he is optimistic about the overall market outlook.
Indicators on the chain realize increased profitability
A large number of Bitcoin investors are likely to lock in profits at current price levels, speculating that the market may reach a new high.
For example, the 30-day average of Bitcoin's Adjusted Cost Output Profit Ratio (aSOPR)—which evaluates the overall profit and loss of Bitcoin transactions—has increased from 1 to 1.03 since May.
A reading above 1 indicates that many investors are selling at a profit and it has been connected to a previous market high formation as shown below.
Another on-chain metric, Net Unrealized Profit and Loss (NUPL), indicates potential fatigue among Bitcoin buyers. NUPL is calculated as the difference between the market cap and the actual cap divided by the market cap, which is the ratio of the total profit/loss across all coins.
That said, a Bitcoin NUPL reading above 0 indicates that investors are profitable and an uptrend in price means that many investors are starting to take profits. This reading typically precedes market corrections, indicating that the 30-day moving average NUPL for Bitcoin on June 30 will move to 0.54.
BTC price hints at bull pennant crash at $56K.
The 4-hour chart of Bitcoin meanwhile is painting a bullish pennant breakout, the pattern following a strong move down as the price consolidates in a triangle.
It resolves when the price breaks decisively below the lower trendline and falls to a length equal to the height of the previous rise.
Applying the same technical rule to Bitcoin's four-hour (4H) chart brings the cryptocurrency's deepest price target for July at around $56,000 — the peak of pain.
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Conversely, if the price breaks below the 50-4H Exponential Moving Average (50-4H EMA, the red wave) around $61,925, this bearish outlook can be eliminated. Such a bullish reversal would place BTC's July target at the 200-4H EMA (the blue wave) or $64,770.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
