Technical anaylsis
Weekly and monthly reversal indicators suggest a broader correction is on the horizon. The weekly RSI peaked in early March and has been declining, even though Bitcoin remains above $60K. The monthly Stochastics mirror previous multi-month peaks, such as January 2018 and May 2021, indicating potential for a downturn.
Currently, Bitcoin prices show a double top formation. A double top is a highly bearish technical reversal pattern that forms after an asset reaches a high price level twice in a row, with a moderate decline between the two peaks. It is defined as a double top when the asset's price falls below the support level that is equal to the low point between the two previous highs.
Possibility of Interest Rate Cuts? Unlikely
The Federal Reserve may not cut interest rates this year. Despite signs of economic weakening, the labor market remains strong. According to a report released by the U.S. Department of Labor on 27 June, unemployment insurance weekly claims (seasonally adjusted) decreased by 6,000 from the previous week's revised level. Inflation is proving more persistent than the Fed anticipated, reducing the likelihood of rate cuts.
Histrical Bitcoin price data
Historically, Q3 (July, August, and September) is the weakest quarter for Bitcoin, with average returns of just +5% over the past 13 years.
Stagnated stablecoin minting
Stablecoin issuance, a key liquidity source and measure of fiat-to-crypto conversion, has stagnated since the Bitcoin halving in April.
Miner's perspective
Bitcoin miners are likely to sell disproportionately at the $60K level, which is close to their average breakeven cost.
To calculate the breakeven price, X for miners.
Bitcoin amount mined per day * Breakeven price, X / powercost per day = 1
Breakeven price, X = powercost per day / Bitcoin amount mined per day
0.00007100*X / 4.32 = 1
X = 4.32/0.00007100 = 60845.07
Options on Bitcoin Futures
The $60K level has been defended by call buyers in recent weeks. However, with those calls expiring on June 28, a new trading range may emerge, potentially setting a lower benchmark.
<Reference>
10x Research https://bit.ly/45I1B44