Bitcoin kicks off the last week of June, heading for a range-low retest as BTC price action nears $60,000.
Dropping another 1.25% since the June 24 daily close, Bitcoin (BTC) continues to test bulls’ nerve with a trip ever deeper into core resistance.
Whether this holds or not is now the key question for the coming days, with the monthly close looming.
To get this far, Bitcoin has already given up multiple moving averages and plunged short-term holders into the red by moving below their aggregate cost basis.
Demand is thus seeing something of a temporary setback, and the focus is on whales in particular amid the lowest prices in over a month.
Factors adding fuel to the volatility mix this week include the classic United States unemployment data release on June 28, along with revised second-quarter gross domestic product (GDP) figures, followed a day later by the Fed’s “preferred” inflation gauge.
Bitcoin thus has its work cut out if a rebound is to set in before the monthly and quarterly close, with BTC/USD now down 7% in June so far.
Cointelegraph takes a look at the current BTC price landscape and investigates the main issues among traders in what is already shaping up to be a significant week for the market.
BTC price hits new six-week lows
Bitcoin disappointed after its latest weekly close, dropping steadily to hit $62,128 on Bitstamp, data from Cointelegraph Markets Pro and TradingView confirms.
This represents its lowest levels since May 15, and with the weekly and quarterly close due in the coming days, bulls now contend with 7% month-to-date losses.
“BTC looks weaker than I expected and should see some more downside,” popular trader Crypto Ed wrote in part of his latest post on X, capturing the mood.
Crypto Ed added that altcoins, already suffering at the hands of the BTC price rout, could see another 20% dive.
Fellow trader Daan Crypto Trades meanwhile set out the key levels within Bitcoin’s multimonth trading range.
“Arrived at the golden pocket Fibonacci retracement level. If there’s bulls left that want to make this into a higher low then this is the spot,” he cautioned on the day.
“A bounce should lead to a mid range retest, where failing to do so likely results in a range low retest.”
Data from monitoring resource CoinGlass showed BTC/USD cutting through bid support above $62,000. The past 24 hours liquidated around $48 million of BTC longs, it confirmed.
PCE week comes as traders focus on Fed liquidity
The macroeconomic data whirlwind is set to make a return in the latter half of the week as U.S. jobless claims, revised Q2 GDP and the May print of the Personal Consumption Expenditures (PCE) index are all released.
Crypto markets have shown themselves to be sensitive to unemployment data, particularly in 2024, while PCE is known to be the Fed’s “preferred” gauge for charting progress on inflation.
This, in turn, could have a significant impact on policy should it significantly miss forecasts in either direction.
“Tons of important data to wrap up Q2 2024 this week,” trading resource The Kobeissi Letter summarized on X.
Kobeissi added that PCE would be responsible for leading the market away from fears of “stagflation” setting in.
Matthew Dixon, founder and CEO of the crypto rating platform Evai, was among the crypto market observers who predicted that the Index would put the cat among the pigeons with a curveball reading.
“Market is waiting for #PCE this Friday 28th. The #FEDs preferred measure of inflation,” he told X subscribers on June 24.
“I expect a lower than expected read which should turn #BTC #Crypto #Altcoins and other risk assets higher imo.”
The latest estimates from CME Group’s FedWatch Tool show that markets continue to see the Fed beginning interest rate cuts — a key moment for crypto and risk assets — in September, and not earlier.
Stocks leave crypto in the dust
In a curious contrast, Bitcoin and crypto weakness come at a time when U.S. stocks are outperforming.
The S&P 500 made new all-time highs last week, underscoring an inverse correlation with Bitcoin that has caught many off-guard.
“Short interest on the S&P 500, $SPY, and Nasdaq 100, $QQQ, ETFs is now at a 6 year low,” Kobeissi noted.
“Since 2023, short interest as a % of shares outstanding has fallen by over 50%. Meanwhile, the volatility index, $VIX, is down 40% since January 2023. Even during the fastest interest rate hike cycle of all time, volatility trades near record lows.”
Kobeissi thus concluded that “market risk appetite has never been stronger,” making crypto’s weak performance all the more striking.
Offering an explanation, market commentator Tomas suggested that Bitcoin continues to be highly sensitive to Fed liquidity levels, these dropping by $140 billion last week.
“Net Fed Liquidity has dropped 2.21% this week, with bitcoin down 4.77%. Stocks have also now dropped slightly, with S&P and Nasdaq down roughly 1% in 24 hours,” he wrote in an X post on June 21.
Tomas suggested that, while not certain, liquidity levels were at or near local lows, implying that a rebound should lift crypto performance across the board.
“These things are always difficult to predict, but if I had to estimate the rough direction of Net Fed Liquidity in the coming weeks/months - I would say where it is now is likely to be the low point or near to the low point, with Net Fed Liquidity grinding upwards,” he forecast.
Earlier, further analysis of Bitcoin’s Fed liquidity correlation concluded that upside may return with the monthly close.
Bitcoin whales under the microscope
As Bitcoin heads toward $60,000, some are asking whether current levels represent an attractive trade to the whale population.
Recent weeks have seen order book “spoofing” driving prices toward liquidity on multiple occasions, producing artificial volatility.
While data shows some classes of whale increasing BTC exposure this quarter, the picture is not a uniform one, Cointelegraph reported.
As noted by popular social media commentator Bitcoin Munger last week, the largest class of whale contrasts with the rest in its accumulation trend.
Fast forward to this week, however, and confidence in broad whale accumulation is growing at $62,000.
“Clear that whales have been buying this dip in record numbers - but the selling volume does not justify the price drops which are manipulated by the market makers, who work for the whales,” fellow commentator MartyParty argued.
An accompanying chart from CoinGlass showed recent whale orders on the Binance BTC/USDT perpetual swaps pair.
Data from onchain analytics platform CryptoQuant meanwhile shows an uptick in inflows to accumulation addresses beginning on June 20.
Crypto sentiment closes in on 2024 lows
At 51/100 as of June 24, the Crypto Fear and Greed Index is nearing its lowest levels of 2024.
Related: Bitcoin price loses ground as TON, PEPE, KAS and JASMY catch traders’ attention
A comparatively small market cap decrease in percentage terms speaks volumes when viewed from a sentiment perspective.
Here, the Index, which just a week ago was nearing “extreme greed,” is now flirting with “fear” territory.
Even when still around $65,000, research firm Santiment noted what it called “rare” fearmongering setting in among Bitcoin market participants.
“The crowd is mainly fearful or disinterested toward Bitcoin as prices range between $65K to $66K. This extended level of FUD is rare, as traders continue to capitulate,” it commented on X on June 20.
“BTC trader fatigue, combined with whale accumulation, generally leads to bounces that reward the patient.”
The overly sour mood was not lost on longtime traders, with Jelle describing it as “worsening by the day.”
“Looks like the chop is doing exactly what it’s supposed to do: shake as many people out as possible, before the ATH run. We saw the same in previous cycles. This time ain’t different,” part of an X post read.
Fellow trading account IncomeSharks argued that the poor climate was the result of trading on emotion.
“Sentiment is so low because people have been overtrading in tough conditions losing money,” it concluded.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.