Bitcoin (BTC) begins the first week of July with a sigh of relief for traders as $30,000 support holds.
BTC price action is refusing to give in to the bears after surging 20% in the second quarter, with weekly and monthly timeframes looking strong. What’s next?
A quiet week is expected in TradFi markets as Wall Street prepares for Independence Day and little is expected on US macro data.
Bitcoin therefore needs volatility triggers from elsewhere if the bulls are to attempt to break through the resistance that has been in place for several months.
Market participants’ opinions on the matter are mixed – some believe that $32,000 and beyond is easy to reach, while others see this month as the peak of the Bitcoin rally in 2023.
Cointelegraph takes a look at some of the key factors shaping BTC price action over the coming days and weeks.
Short-term BTC price upside predictions range as high as $40,000
Bitcoin’s weekly close suited the bulls and offered only moderate volatility as BTC/USD continued to surge overnight.
Bitstamp saw a visit to $30,850 for the new week, according to data from Cointelegraph Markets Pro and TradingView, the latest attempt to close the $31,000 mark and yearly highs.
BTC/USD 1 hour chart. Source: TradingView
However, the fuel for a reversal is lacking, prompting more optimistic traders to wait and see if the uptrend continues.
“My Bitcoin plan remains the same,” popular trader Jelle summarized to Twitter followers in his latest analysis.
“Market structure is bullish, we reclaimed the 200-week EMA. Once we reach the $32,000 resistance area, I expect the bull market to begin. Until then, we trade the range and buy deeper pullbacks.”
Jelle pointed to the 200-week exponential moving average (EMA), which along with its counterpart the simple moving average (SMA), continues to act as market support after a brief challenge in June.
An attached chart showed the first major upside target as the current all-time high at $69,000.
Annotated BTC/USD chart. Source: Jelle/Twitter
Fellow trader Crypto Ed was hoping for a rally towards $36,000 and even $40,000 while initially considering the likelihood of a drop to $28,000 – already a popular buy dip zone.
He said market structure remained “good” through month-end despite last-minute volatility, with BTC/USD rallying to $29,500.
On-chain monitoring resource Material Indicators, meanwhile, pointed to the role played by bitcoin whales in maintaining the BTC price range.
“No question, BTC whales have made distributions in the $30,000 range, but they have also been buying on dips, which has helped keep BTC in that range,” added some of the further analysis.
As Cointelegraph reported, there has never been a more than 10% loss in BTC price in July, but that hasn’t stopped a popular trader, CryptoBullet, from forecasting an end to the upside this month.
CryptoBullet forecasts a $36,000 area as the local top and predicts that a downtrend – including the abandonment of the major moving averages – will be next.
“I’m not saying we’re going to go down to 20,000 this month or next. In my opinion it will happen in the fourth quarter,” he wrote in subsequent Twitter comments on his original prediction.
Banks in focus due to losses on bond purchases
The macroeconomic climate appears mercifully calm this week as the US focuses on the 4th of July Independence Day holiday.
Macroeconomic data is scarce and apart from curveball events, cryptocurrencies are likely to experience little volatility from sources such as changing inflation expectations.
However, those expectations remain anchored in rate hikes returning later this month when the Federal Reserve meets to decide future policy.
As of July 3, data from CME Group’s FedWatch tool puts the probability of a 0.25% hike to nearly 90%. The decision should be made in three weeks.
Chart showing the Fed’s target rate probabilities. Source: CME Group
“Every week feels crucial as Fed rate expectations change rapidly. Now, stocks are hitting 52-week highs and trading has been great,” financial commentary source The Kobeissi Letter summarized sentiment, calling the week ahead “short but important.”
Elsewhere, increasing attention is being paid to the US banking sector.
Regional banks continue to struggle, as reflected in the performance of the KBW Regional Banking Index (KRX).
Even the Bank of America (BoA) is in the spotlight with its loss-making bond purchases, a problem the German central bank is also facing.
“These incredible headlines don’t get enough attention,” angel investor Balaji Srivinsan argued about a Financial Times article about the Bundesbank’s predicament.
“The central bank of the world’s fourth largest economy may need a bailout for buying bonds. This is not a technology crisis or even a banking crisis. It’s a bond crisis, a central bank crisis, a fiat crisis.”
Kobeissi, meanwhile, warned that the US bank implosions that sparked Bitcoin’s bull market in March bore significant similarities to the BoA’s current situation.
Bitcoin miners question record transfers
Bitcoin miners have stressed the importance of BTC price breaking through and sustaining $30,000 — but perhaps not in the way bulls would like.
Data from on-chain analytics firm Glassnode shows a huge increase in the amount of coins miners are sending to exchanges.
This even surpassed April 2021 levels when BTC/USD hit the first new all-time high of the year at $58,000.
“After the spot price surged above the psychologically important $30,000 level, bitcoin miners have continued to send large amounts of BTC to exchanges,” Glassnode commented.
“Currently, miners are transferring $105 million to exchanges, the second-largest USD-denominated transfer on record.” Annotated chart of Bitcoin miners’ inflows to exchanges. Source: Glassnode/Twitter
However, since the beginning of 2023, miner balances have continued on a slow upward trend overall. According to data from Glassnode, the balance was 1,824,377 BTC on Jan. 1 compared to 1,827,916 BTC on July 2.
Bitcoin balance in miner wallets chart. Source: Glassnode
Despite the selling, there is little evidence of BTC miners getting into trouble. Hash rate currently remains near all-time highs, while network difficulty is just 3.26% below its own record level from last month.
Overview of the basics of the Bitcoin network (screenshot). Source: BTC.com
Profitable BTC traders refuse to sell
A more inspiring picture emerges from the staunch bitcoin investor cohorts refusing to sell at any price.
Even in the context of this year’s gains, bitcoin traders remain determined not to take bulk profits.
This is now reflected in the amount of BTC supply, which is considered “illiquid” or out of reach should strong buying pressure return.
Glassnode’s illiquid supply change metric is “extremely elevated” and is currently at levels that have not been reached at any point except during the bear market bottom of 2022. While prices have risen, so has hodler conviction.
On paper, Hodler has every reason to take a profit at $30,000. Glassnode’s LTH Long-Term Holder Market Value to Realized Value (MVRV) metric, which represents the profitability of coins held for 155 days or more, currently shows the average LTH company posting a 47% gain achieved his position.
Bitcoin Long-Term Holder Market Value to Realized Value (LTH-MVRV) chart. Source: Glassnode
Sentiment reflects investor indecisiveness
Finally, the nervousness of the average crypto market participant continues to be evident in sentiment data.
Related: Bitcoin Speculators Send 35,000 BTC to Exchanges, Leading to New ‘High Spirit’ Inflow
The Crypto Fear & Greed Index continues to show how malleable sentiment is based on how Bitcoin deals with the $30,000 mark.
It’s not just BTC/USD that faces an important task of reversing resistance/support – Ether (ETH) also has a lot of work to do to regain the $2,000 level.
Therefore, “fear and greed” continues to oscillate between the mid-1950s – “neutral” – and the mid-1960s or “greed”.
Crypto Fear and Greed Index (screenshot). Source: Alternative.me
The current highs for the index in 2023 are 69/100, with readings only about 10% higher at Bitcoin’s 2021 all-time high of $69,000.
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This article does not contain any investment advice or recommendations. Any investment and trading venture involves risk, and readers should do their own research when making their decision.
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