Bitcoin (BTC) is on the verge of concluding June with a monthly deficit while holding onto the crucial $60,000 support level.
Unfortunately, a challenging path lies ahead for the BTC/USD pair as several bearish signals suggest a potential increase in selling pressure in July.
One of the most significant bearish events in the cryptocurrency realm in June was the much-anticipated Mt. Gox repayments. Mt. Gox, formerly the largest Bitcoin exchange, is set to reimburse 140,000 BTC valued at roughly $9 billion to its creditors, commencing in early July 2024. This repayment comes after a decade-long wait following the exchange’s collapse in 2014, resulting in the loss of over 850,000 BTC.
The impending distribution has sparked concerns about a surge in selling pressure, with analysts forecasting a notable decline in Bitcoin prices as creditors might opt to sell the assets they receive to capture profits. This is particularly noteworthy given Bitcoin’s astounding 16,000% price surge since the hack.
For instance, JPMorgan analysts, led by Nikolaos Panigirtzoglou, highlight the actions of Gemini creditors who likely liquidated a portion of the $2.18 billion in Bitcoin subsequent to Gemini’s announcement on May 29, supporting the bearish argument.
Analyst Degen Kid predicts a potential drop in Bitcoin’s price to approximately $55,000 amid the Mt. Gox repayment in July, despite holding an optimistic view of the overall market.
Moreover, on-chain indicators suggest a growing trend of profit-taking among Bitcoin investors who seek to secure gains at current price levels, speculating that the market could be nearing its peak. Notably, the 30-day average of Bitcoin’s Adjusted Spent Output Profit Ratio (aSOPR) has increased from 1 to 1.03 since May, indicating more investors are selling at a profit. This behavior has historically aligned with market top formations.
Another on-chain metric, Net Unrealized Profit and Loss (NUPL), hints at a probable exhaustion of upside potential among Bitcoin buyers. NUPL, calculated as the difference between market cap and realized cap divided by market cap, signifies the total profit/loss in all coins as a ratio. A NUPL reading above 0 implies investors are in profit, with an upward trend indicating a growing number of profitable investors. This trend typically anticipates market corrections, with Bitcoin’s 30-day average NUPL hovering around 0.54 as of June 30.
In the realm of technical analysis, the 4-hour Bitcoin chart suggests a potential breakdown of a bull pennant pattern, typically forming after a significant downward move where the price consolidates within a triangular structure. A decisive break below the lower trendline projects a decline in price equivalent to the previous uptrend’s height, hinting at a target around $56,000 for July.
However, a bullish scenario could materialize if the price surpasses the 50-4H exponential moving average (50-4H EMA) situated at approximately $61,925. In such a case, a bullish reversal could set BTC’s upward target for July near its 200-4H EMA at $64,770.
It is crucial to note that this article does not provide investment advice or recommendations. All investment and trading decisions involve inherent risks, and readers should conduct thorough research before making any financial decisions.