Summary

  • Bitcoin experienced a decline of 2.89% this week, settling at $61,749 after failing to surpass the $64–65K resistance level, which was crucial for a shift in the short-term outlook.
  • Ethereum has registered a weekly death cross for the first time in several years, with its 50-week EMA dropping below its 200-week EMA. Traders in prediction markets are now estimating a 72.3% likelihood that ETH will hit $1,500 before recovering to $3,000.
  • The overall crypto Fear & Greed Index stands at 23, indicating extreme fear, while Bitcoin ETFs have recently concluded a 10-day streak of outflows totaling $2.7 billion.

The cryptocurrency market is facing significant challenges as it enters the second week of July.

Bitcoin is barely holding above the $60,000 mark after recently hitting a 21-month low below $58,000. Meanwhile, Ethereum is trading below $1,750, down approximately 4% for the day and over 30% year-on-year. The broader cryptocurrency market is also experiencing declines, with altcoins suffering even greater losses.

Since January, the total market capitalization of cryptocurrencies, excluding BTC and ETH, has decreased by 30%. Crypto IPOs like Gemini, Bullish, and BitGo have faced severe downturns since their launches.

The overall sentiment in the market is understandably bleak.

However, such negative sentiments have historically been proven wrong at critical moments. Major Bitcoin bear cycles since 2009 have typically concluded with extreme fear and a time when shorting appeared to be the obvious strategy.

Bitcoin has undergone four of these cycles, and almost every time, a pre-halving compression phase occurred, where prices declined and sentiment soured before the next supply shock. The next halving, which will reduce mining rewards by 50% and thus the supply of new Bitcoin, is approximately 21 months away, historically marking the beginning of accumulation periods.

This cycle, however, is different; cryptocurrency has now entered the mainstream.

Recent developments, including spot Bitcoin ETFs, institutional investments, updated accounting standards, and a regulatory framework for digital assets have emerged since the last halving. Bitcoin's institutional status has evolved from a niche interest to a more significant asset class. This change does not eliminate volatility but indicates that the participants in the current bear market are different from those in the past. Whether this accelerates or postpones the market bottom remains uncertain, as the current charts suggest a bearish outlook for now.

Bitcoin's price: cautious optimism

Bitcoin began the week at $63,587, peaked at $64,657, but ultimately closed lower, indicating that bulls attempted to rally but fell short. Currently, Bitcoin is priced at $61,749, representing a weekly decline of 2.89%.

It's notable that BTC dipped to $58,035 just days ago, marking a 21-month low before rebounding.

The resistance zone that halted the upward movement is the one closely monitored by traders. The $64–65K range has acted as a ceiling since early June, and this week’s attempts barely touched it before retracting. On Myriad, a prediction market created by Decrypt’s parent company Dastan, traders have placed nearly 73% odds that Bitcoin will hit $55,000 before reaching $84,000. Sentiment shifted on June 2, with prior indicators suggesting bullishness among informed traders.