Relief Rally or Trap? My Year-End Crypto Outlook

  • Bitcoin’s 7% Drop in June: Bitcoin fell approximately 7% in June, hitting $58,200, a significant level where long liquidations were sitting. Now, the price eyes a key resistance level at $63,800.
  • Presidential Cycles and Market Impact: Volatility is real, but analyzing past data can help paint a picture of the current climate.
  • Bitcoin Inflows Surge: U.S.-based spot Bitcoin ETFs recorded significant daily inflows of $129.45 million on July 1, marking the fifth consecutive day of positive flows.

In the dying hours of the 6-monthly, 3-monthly, and monthly close, we saw Bitcoin rally to approximately $63,000 after breaching lows around $58,000. June was an interesting month for Bitcoin. Technically, Bitcoin was in a downtrend from June 7th after producing a Double Top and then consecutive Lower Highs and Lower Lows on the daily and 4-hour timeframes. Bitcoin has since broken out of this short-term downtrend, finding support at the key level of $58,000, where it also bounced back in May.

Source: TradingView

Signs of a Relief Rally, But Will It Last?

Often, after significant drops, there is a relief rally as selling pressure eases. The challenge is determining whether the sellers are done or if it’s simply a relief rally before another dip. The old saying goes, “buy the dip,” but people can end up buying multiple dips. This is where data combined with technical analysis can be a helpful tool. The total market capitalization dropped approximately $400 billion from $2.5 trillion.

Source: TradingView

Stable Coin Outflow Insights

Stable coin outflow from exchanges surged massively in April, but data shows this surge has since decreased despite the latest market activity in June, which saw Bitcoin range between $72,000 and $60,000. This data suggests that selling pressure is easing overall across the crypto market. However, it is important to note that June was still the second-highest month in transaction outflows.

This chart shows the average size of the total coins amount of the top 10 USDT transactions outflow from exchanges.

“History Doesn’t Repeat Itself, But It Often Rhymes”

Looking at past data, July is typically a positive month for Bitcoin. Although this shouldn’t be used to insinuate a bullish turn of events, I am looking for signs to determine whether this is the bottom before we see another push towards $70,000. On average, since Bitcoin’s inception, July has produced a return of approximately 7.42%.

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When you consider the Presidential Cycle and the Dow Jones Industrial Average Seasonality, June can historically be a tough month. This report is based on 73 years of data and is something I am monitoring. However, I won’t use it for long-term investment decisions given the current global economy. It’s important to note that despite the historic data, past results are not indicative of future results.

Some people wonder why this is relevant to Bitcoin, while others question its validity. All I can say is that we’re in an era where crypto is breaking through, and there has been a strong historical correlation between Bitcoin and global stock markets. This is why I monitor the overall markets closely and focus heavily on understanding market correlations. In my opinion, Bitcoin is simply another investment not a saviour to our world’s global debt crisis.

Last week, our Empire Live Traders Summit on the Gold Coast was a massive success! Community members flew in from all over Australia and New Zealand. Want to join the Empire Crypto Trading community? Simply register on our Empire Crypto Trading Social Media and Educational Platform. Stay updated with the latest crypto charts, get FREE education, access airdrop guides, and much more. Sign up now and be part of the Empire!

At the time of writing this article, Bitcoin was trading at $62,735.

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial advice. The author takes no responsibility for any financial losses incurred as a result of trading or investing based on the information provided. Always conduct your own research and consult with a professional financial advisor before making any investment decisions.

Matthew Stella
Author

Matthew Stella

Matt Stella embarked on his crypto trading journey when Bitcoin was valued at just $3,000. As the co-founder and Head Coach at Empire Crypto Trading, Matt excels in Technical Analysis and in pinpointing key areas of price action. He is dedicated to empowering the crypto community through education, offering weekly Market Scans, Technical Analysis tutorials, and leading a vibrant community of crypto enthusiasts on the Empire Crypto Trading platform, where members collaborate to navigate the market. Every Tuesday, he shares his invaluable market insights with the CNA community.

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