Bitcoin's price is currently holding above the critical $60,000 support level, but analysts warn that a flash crash to $40,000 is still possible in the near term. The cryptocurrency has been trading in a tight range around $60,000 for the past week, with the 200-day moving average providing additional support just below at $58,000.
However, the overall technical picture for Bitcoin remains bearish. The price is still down over 15% from its June peak near $72,000 and is trading below its 50-day moving average, signaling a period of indecision. Prominent Bitcoin skeptic Peter Schiff has been sounding the alarm, noting that Bitcoin underperformed gold by 19% in Q2 and cautioning those who switched from gold to Bitcoin ETFs about the potential for further losses.
Demand for Bitcoin has been waning, with CryptoQuant data showing 23,000 BTC that hadn't moved in over a year being sold recently. This increased supply, coupled with insufficient buying pressure, is contributing to the downward price action. Factors like the launch of US Bitcoin ETFs and overall market sentiment are also weighing on the cryptocurrency.
Upcoming economic data releases could add further volatility to crypto markets this week. On June 28, the US will report unemployment figures, followed by revised Q2 GDP data and the Fed's preferred inflation gauge on June 29. These reports could impact expectations around future Fed policy and the US dollar, which has been weakening recently.
If Bitcoin fails to hold above $60,000, the next major support level to watch is around $51,500, which could trigger a 15% decline from current levels and a 30% drop from the March peak. Conversely, a breakout above $62,231 would invalidate the bearish outlook and potentially lead to a bullish reversal.
Traders are advised to closely monitor Bitcoin's price action around these key levels. If the $60,000 support breaks, it could open the door for a flash crash to $40,000 or lower. However, if Bitcoin can regain the $64,500 level, it may set the stage for a move back towards $70,000.
The crypto market remains highly volatile and sensitive to macroeconomic factors. While Bitcoin has shown resilience at $60,000, the overall technical picture suggests caution is warranted. Investors should closely follow economic data releases and be prepared for potential downside risks in the near term.
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