BTC Price Risks ‘Double Top’. As we head into the second week of July, Bitcoin is in a precarious position, with traders fearing that its price will continue to fall. Bulls are facing nightmares as Bitcoin BTC $55,741 hits its lowest weekly close in four months, accumulating unrealized losses and forecasting further agony.
Even though the trading community was shocked by the magnitude of the losses recently, they are prepared for even lower depths. There is still room for a journey toward, or even below, $50,000 because the current decline is still tiny historically.
Long-term market participants are closely monitoring the key players to observe their response to this challenging situation. Investors are scrutinizing different groups: some of Bitcoin’s “diamond hands” and speculators are currently experiencing negative returns on their assets.
Bitcoin debt repayments to creditors of the now-defunct Mt. Gox exchange, as well as sales by the US and German governments, appear to be the driving forces behind the recent downturn. Sentiment highlights the market’s sensitivity to these subjects: the crypto dread and greed index has dropped 60% in the last month, reaching “extreme fear” levels. Looking at several perspectives on how the strength of the BTC Price Risks ‘Double Top’ might respond is necessary due to the widespread uncertainty surrounding the impact of these variables.
Bitcoin: More Downside Probable
Traders were hoping over the weekend that Bitcoin would be back in action after bouncing $5,000 from previous lows. According to TradingView data, everything changed at the weekly close, when BTC/USD returned to $54,300 and continued to trade roughly $2,000 higher due to increased volatility.
Coincidentally, with Bitcoin’s weekly close below the May low, the strength on Friday leads us to believe that there will be a dead cat bounce and further decline in the coming weeks, as expressed by popular commentator Mark Cullen in a discouraging reaction on X. The research firm Santiment highlighted the extent of the bad performance on Bitcoin and altcoins.
As the weekend draws to a close, the cryptocurrency market has once again shown signs of retracement, reigniting traders’ fears following a brief rebound. Overall, it says that Bitcoin’s value has dropped 2.3% in the last day, 8.6% in the last week, and 18.4% in the last month. There have been much bigger drops for most altcoins.
Now is the moment to be ready for impact, according to famous trader Tony “The Bull” Severino. He warned, “Bitcoin closed below the lower Bollinger Band on the weekly,” accompanied by a chart displaying the Bollinger Band volatility indicator. A sell signal has been detected. Greater unfavorability is likely. X followers received similar news from fellow trader and commentator Matthew Hyland, who is often known for his positive BTC Price Risks ‘Double Top’.
“BTC has confirmed a weekly breakdown out of the multi-month consolidation range,” he said. “BTC is still in an uptrend; a break below $38,000 would signal the end of the uptrend, so it is in full force. However, this weekly breakdown opens the door to lower price targets.”
Sub-$50,000 BTC Price Targets Hinge on RSI
Traders disagree about the potential floor for the Bitcoin/USD pair during the most recent downturn. Keith Alan, co-founder of the trading resource Material Indicators, remarked, “The weekly close for Bitcoin was ugly.” (Alan, 2017). There appears to be a lot of speculation on CT about the bottom being in, but I haven’t yet seen any verified proof of that. I still have my doubts that $53.5k will hold, but a retest of support would provide the confirmation we’re seeking.
Alan and Hyland have both highlighted RSI indications suggesting Bitcoin is “oversold” at present prices. He agreed, “I’m watching the Weekly RSI very closely,” and included a chart of one of Material Indicators’ unique trading tools that showed possible bounce zones. “Get ready for a journey to Bearadise if 42 on the Weekly RSI doesn’t hold.”
As of July 8, the weekly RSI was 45.6, and Hyland is predicting that we may see lower values in the near future. During last year’s August and September, when Bitcoin was trading at $25,000, the weekly relative strength index (RSI) almost returned to those lows, he said. “If the RSI declines, another red weekly candle is likely to trigger bearish divergence.”
Meanwhile, seasoned trader Peter Brandt hinted that Bitcoin’s most recent all-time high could have been part of a “double top” formation, bringing up the year 2021 in the process. Although not officially stated, he predicted that if the BTC/USD pair kept falling, the target would be $44,000.
Bitcoin Speculators in the Red
Some traders, both long and short BTC, have been too excited in the past week, leading to liquidations; others can only sit tight and wait. A growing percentage of Bitcoin holders are in the red when it comes to their investments. Axel Adler Jr., a contributor to the onchain analytics site CryptoQuant, speculated that this might be a time bomb based on his analysis of unrealized profit and loss.
No one is mentioning the 218K BTC in unrealized losses of STH whales, which are causing a minor panic in the market because of the small-scale sales of Mt. Gox/Govt coins. “If they lose their nerve, I don’t know what the market will do,” he said on X.
For large-scale entities that hold a certain unit of Bitcoin for 155 days or less, known as “short-term holder whales,” an accompanying chart displayed the profit and loss that went unrealized. Mignolet, a fellow CryptoQuant writer, expressed some optimism about the larger STH base, which is now losing money with a cost basis of approximately $64,000. He pointed out that the cohort’s spent output profit ratio (SOPR), which tracks the profitability of onchain transactions, is currently behaving similarly to what it did a year ago.
According to short-term SOPR data, the BTC Price Risks ‘Double Top’ may be approaching its bottom if the current cycle is still in a bullish phase and not in a season-out phase. In one of CryptoQuant’s Quicktake blog entries, he stated that this trend is very similar to the period in September last year.
CPI, PPI, and Fed’s Powell Line-Up
If Bitcoiners didn’t have enough to worry about this week, a new flood of macroeconomic data will test the mettle of risky assets in the days to come. The US PPI and CPI reports for June, scheduled for release on July 11th and 12th, will provide this information.
Inflation continues to significantly impact the market mood, and Jerome Powell’s testimony to the US Senate has only intensified the situation. Because the Federal Reserve will be meeting in about three weeks to vote on interest rate changes, the forthcoming statistics will be crucial for gauging the current state of affairs.
“Get ready for a busy week ahead,” advises the trade resource. The X-prediction from the Kobeissi Letter. Still, with a probability of only 6.7%, the most recent projections from CME Group’s FedWatch Tool show that the Fed is very unlikely to change rates in July. Unexpected macro data results have already demonstrated their capacity to impact crypto market patterns. The outcome of this week’s CPI statistics, among other things, will determine my next move, but until then, I’m planning to bet lower,” pundit Cullen said.
Sentiment Retraces Bull Market Gains
Once again, we find ourselves at the beginning of the Bitcoin bull market on the Crypto Fear and Greed Index. The standard emotion gauge has gone from “extreme greed” to “extreme fear” during that timeframe, even if BTC/USD is down 25% from all-time highs in March.
As of July 8, the index had fallen to its lowest point since early 2023, at just 28 out of 100. It has lost roughly 50 points in the past month. But for well-known trader Moustache—one of the few upbeat voices in the industry—the irony is obvious.
Optimism reached an all-time high in 2021, when Bitcoin was circling levels that corresponded to its initial high. As $BTC retests its 2021 ATH, the Crypto Fear & Greed Index indicates ‘Fear’. In late June, he made a historical comparison, noting that it was similar to both 2017 and 2020.
