Bitcoin (BTC) kicks off the first week of July with a sigh of relief for traders as the $30,000 support holds.
BTC price action refuses to succumb to bears after 20% gains in Q2, with weekly and monthly timeframes looking good. What’s next?
A quiet week is expected in TradFi markets, with Wall Street gearing up for the Independence Day holiday and little in store for US macroeconomic data.
So Bitcoin needs volatility triggers from elsewhere if bulls are to have a chance to break resistance for several months.
Opinion among market participants is divided on the subject, as some believe $32,000 and above is easily achievable, while others view this month as the pinnacle of Bitcoin’s 2023 recovery.
Cointelegraph looks at some of the key factors that will influence BTC price performance in the coming days and weeks.
Short-term BTC price upside calls extend to $40,000
Bitcoin’s weekly close was useful for bulls, with only modest volatility, with BTC/USD continuing higher overnight.
The new week saw a visit to $30,850 on Bitstamp, according to data from Cointelegraph Markets Pro and TradingView, marking the latest attempt at $31,000 and yearly highs.
Fuel for a trend reversal remains absent, leading more optimistic traders to wait for upward continuation to arrive.
“My Bitcoin plan remains the same,” popular trader Jelle In summary to Twitter followers in part of his latest analysis.
“The market structure is bullish, we reclaimed the 200-week EMA. Once we hit the $32k resistance area, I expect the bull market to kick in. Until then, we’ll trade the range and buy deeper pullbacks.
Jelle was referring to the 200-week exponential moving average (EMA), which, along with its counterpart simple moving average (SMA), continues to serve as market support after a brief challenge in June.
An accompanying chart showed the first major upside target as the current all-time high at $69,000.
Fellow trader Crypto Ed was hoping for a push towards $36,000 and even $40,000 while first considering the likelihood of a retracement to $28,000 – already a popular dip-buying zone.
The market structure, he said, remained “good” despite last-minute volatility through the end of the month, with BTC/USD falling as low as $29,500.
# BTC follows my $36+40k plan so far…
Nice reactions Friday to red and green bin.
In my next YT update I will explain what I expect from this. 1 more ABC down towards 28k, or just up?
Should be online around 10am CET. pic.twitter.com/Xu13Ra0mP5
— Ed_NL (@Crypto_Ed_NL) July 3, 2023
Meanwhile, the on-chain monitoring resource Material Indicators pointed to the role of Bitcoin whales in maintaining the BTC price range.
#FireCharts shows that Purple Whales bought dips and distributed through the range, and Brown Mega Whales bought liquidity at resistance to increase the range.
Historically, Purple Whales have had the most influence #Bitcoin FATHER.
Use promo code MIJ4TH for 25%… pic.twitter.com/QE1UDypKHZ
— Material Indicators (@MI_Algos) July 3, 2023
“There is no question that BTC whales have been distributing in the $30,000 range, but they have also bought into the dips that have helped keep BTC in this range,” part of further analysis added.
As Cointelegraph reported, July has never seen more than 10% losses for the price of BTC, but that hasn’t stopped one popular trader, CryptoBullet, from predicting an end to bullish moves this month.
CryptoBullet forecasts the area around $36,000 as the local high and predicts that the downside – including the abandonment of major moving averages – will come after that.
“I’m not saying we’re going to 20k this month or next. Imo it will happen in Q4,” he said wrote in subsequent Twitter comments on his original prediction.
Banks under scrutiny for losses on bond purchases
The macroeconomic environment looks mercifully calm this week as the US focuses on the July 4 Independence Day holiday.
Little macroeconomic data is available, and aside from curveball events, crypto should receive little volatility from sources such as changing inflation expectations.
However, those expectations remain anchored in interest rate hikes returning later this month when the US Federal Reserve meets to decide on future policy.
As of July 3, data from the CME Group’s FedWatch Tool puts the probability of a 0.25% increase at nearly 90%. The decision will be made in three weeks.
“Each week feels crucial as the Fed’s interest rate expectations change rapidly. Meanwhile, shares are rising to their highest levels in 52 weeks and trading has been tremendous,” the source for financial commentary says The Kobeissi Letter. In summary about the vote and called the week ahead “short but important.”
Elsewhere, increasing attention is being paid to the US banking sector.
Regional banks continue to struggle, as evidenced by the performance of the KBW Regional Banking Index.
Is this the most important chart today?
⚠️The Regional US Banking Index⚠️
Down by two-thirds and yet it can’t find a bid
Shorted by everyone, and yet it can’t catch a bid…
The 2008 monologue says the fat lady sings when this recovers 50% of his losses, $105 – $110, and yet… pic.twitter.com/ATeuxuasFG
— Hugh Hendry Eclectic (@hendry_hugh) July 1, 2023
Even Bank of America (BoA) is on the radar for its loss-making bond purchases, a problem the German central bank is also facing.
“These incredible headlines are not getting enough attention,” said Balaji Srivinsan, an angel investor argued about an article in the Financial Times about the predicament of the Bundesbank.
“The central bank of the world’s fourth-largest economy may need a bailout because it bought bonds. This is not a technical crisis or even a banking crisis. It is a bond crisis, a central bank crisis, a fiat crisis.”
Kobeissi, meanwhile, warned that the US bank implosions that sparked the Bitcoin bull run in March bore important similarities to the current situation with BoA.
Sounds familiar? That’s because it is.
Both Silicon Valley Bank and First Republic collapsed for this reason.
— The Kobeissi Letter (@KobeissiLetter) July 2, 2023
Bitcoin Miners Dispute Record Exchange Transfers
Bitcoin miners have underlined the importance of getting past the BTC price action and holding on to $30,000 – but perhaps not in the way bulls would like.
Data from on-chain analytics company Glassnode reveals a massive increase in the number of coins miners send to exchanges.
This even surpassed the April 2021 level, when BTC/USD reached $58,000 in the first of the new all-time highs of the year.
“Following the spot price surge above the psychologically significant $30,000 level, Bitcoin Miners have continued to send large clips of BTC to exchanges,” noted Glassnode.
“Currently, miners are sending $105 million to exchanges, the second largest USD transfer on record.”
However, miner balances have maintained a slow overall upward trend since the start of 2023. On January 1, Glassnode data shows that the balance was 1,824,377 BTC, compared to 1,827,916 BTC on July 2.
Despite the sales, there is little evidence that BTC miners are struggling. The hash rate currently remains near all-time highs, while network issues are only 3.26% below last month’s record levels.
BTC hodlers in profit refusing to sell
A more inspiring picture comes from the loyal cohorts of Bitcoin investors who refuse to sell, regardless of price.
Even within the context of this year’s gains, Bitcoin hodlers remain steadfast in their decision not to take profits en masse.
This is now reflected in the amount of BTC supply that is considered “illiquid” or out of reach if strong buying pressure returns.
Glassnode’s illiquid stock change metric is “extremely high” and currently at levels not seen at any time except during the pit of the 2022 bear market. While prices have risen, so has hodler’s belief.
The #Bitcoin Change in illiquid supply remains extremely high near cycle highs as HODLing remains prominent.
Currently, coins in illiquid wallets with little to no spending history are flowing at a rate of +194.5K BTC per month.
— glassnode (@glassnode) June 28, 2023
On paper, hodlers have every reason to take a $30,000 profit. Glassnode’s Long Term Holder Market Value to Realized Value (LTH-MVRV) metric, which charts the profitability of coins held for 155 days or longer, currently shows the average LTH entity making a 47% profit on their position.
Sentiment reflects investors’ indecisiveness
Finally, the jittery nature of the average crypto market participant remains evident in sentiment data.
Related: Bitcoin Speculators Send 35,000 BTC to Exchanges in New ‘Elation Inflow’
The Crypto Fear & Greed Index continues to highlight how malleable the sentiment is depending on how Bitcoin handles the $30,000 mark.
It’s not just BTC/USD that faces a major resistance/support reversal task; Ether (ETH) is also struggling to recover $2,000.
As such, Fear & Greed continues to fluctuate between the mid-50s and mid-60s, representing “neutral” to “greedy” market sentiment.
Current 2023 highs for the Index are 69/100, with levels at Bitcoin’s 2021 all-time highs of $69,000 only about 10% higher.
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This article does not contain any investment advice or recommendations. Every investment and trading move involves risk and readers should do their own research when making a decision.