Summary
- Bitcoin successfully crossed the $64K resistance level on Tuesday, currently trading at $64,858, a slight decrease of 0.18%.
- A death cross pattern on the charts indicates a bearish macro trend, with BTC approximately 5% above a threshold that could trigger a confirmed downtrend.
- On Myriad, traders are estimating a 66.6% likelihood that Bitcoin will drop to $55K before reaching $84K again.
While Wall Street had a strong Tuesday, Bitcoin and the broader cryptocurrency market are facing instability.
The S&P 500 rose by 0.39%, and the Nasdaq increased by 0.67% on Tuesday, driven by a June Producer Price Index (PPI) report that fell short of expectations, showing a monthly decline of 0.3% largely due to a drop in gasoline prices. This data has significantly reduced the chances of a Federal Reserve rate hike in July, dropping from 31% last week to only 12.3% today, according to the CME FedWatch. Stable or declining interest rates typically favor riskier assets like tech stocks and cryptocurrencies.
The VIX, known as Wall Street’s “fear gauge,” decreased to 16.5 points, indicating overall trader confidence and a lack of anticipated volatility. Major financial institutions including Goldman Sachs, Morgan Stanley, JPMorgan, and Citi reported Q2 earnings that surpassed analyst expectations. The overall macro sentiment is calm, risk-on, and cautiously optimistic.
This context makes the current analysis of Bitcoin's price chart particularly intriguing.
Bitcoin Price: A Breakout Lacking Confidence
Bitcoin broke through the $64K resistance on Tuesday, reaching a daily high of $65,511 before settling at $64,858—essentially unchanged, with a minor drop of 0.18%. This breakthrough is significant for a cryptocurrency that had faced resistance at this level for nearly two weeks.
The question now is whether this breakout will hold.
The chart reveals a descending trend channel that has been in place since Bitcoin's peaks in May near $82,000, characterized by a noticeable downward trendline overhead. The breakout has nudged BTC outside this channel, albeit just slightly. A decline of 5% from this point could reinstate the bearish structure, allowing bears to regain control.
The overall outlook remains bearish. Our aggregated indicator score stands at -36%, primarily due to a formation known as a death cross, where the average price of the last 50 days is below that of the last 200 days. This is a widely recognized signal of a long-term bearish trend, with no indication that the gap between the two averages is closing.
The Average Directional Index (ADX) is currently at 23.4, suggesting that the bearish trend is weakening, though it remains active. The ADX measures trend strength on a scale from 0 to 100, with traders typically using 25 as a threshold: above it indicates a strong trend, while below it suggests a choppy market.
However, traders might find some solace in the fact that the signal is shifting from Di- (bearish dominance) to Di+ (bullish dominance), indicating a potential shift, although not yet confirmed.
The Relative Strength Index (RSI) is at 55.7, which is neutral to slightly bullish, with potential to rise before entering overbought territory above 70. The Squeeze Momentum Indicator, which indicates potential explosive movements, is currently inactive, but momentum is increasing at 1.75 and trending upward. When this momentum is released, it typically results in a sharp movement, but the direction remains uncertain, necessitating the use of other indicators.
Reasons for a Potential Bullish Scenario
The macroeconomic environment is currently favorable. Diminishing inflation, robust corporate earnings, and a Federal Reserve unlikely to raise rates in July create conditions conducive to risk assets.
Additionally, the son of the U.S. President has been openly promoting Ethereum, the second-largest cryptocurrency by market cap. While this is not definitive, it does indicate that interest from affluent and politically connected investors in crypto persists.
https://twitter.com/EricTrump/status/2076065170099417470
The ADX transition from Di- to Di+ implies that buying pressure is increasing. The RSI still has room before reaching overbought levels. If Bitcoin can maintain above $64K for several sessions and confirm the breakout, targets around $66,500 to $67,600 could become viable, with $70K possible if momentum continues to build.
Arguments from Bears (and Myriad)
Fibonacci analysis of support and resistance levels places Bitcoin at the 100% level of a bearish leg that dropped from $64,657 to $61,246, precisely where sellers typically re-emerge following a recovery. The golden zone of most activity (the 50%–61.8% retracement band at $62,952–$63,354) was cleared on the way up, making it a critical area to watch if bulls lose control.
Moreover, on Myriad, a prediction market developed by Decrypt's parent company Dastan, the community is skeptical about the breakout's sustainability.
Prediction market traders have assigned a 66.6% chance that Bitcoin will fall to $55K, compared to a mere 33.4% for a rise to $84K. Notably, these odds have remained unchanged despite the price fluctuations, reflecting a 2-to-1 bias towards further declines—indicating that Myriad traders have had a more accurate read on Bitcoin's recent movements than those who are optimistic about the charts.