Bitcoin
Bitcoin Looks Poised for a July Rally, But Several Things Could Go Wrong for BTC — Here’s How ⋆ ZyCrypto
Bitcoin (BTC) has had a tough end to June, threatening to fall below the $60,000 mark, but investors are looking for light at the end of the tunnel in July.
Despite the underlying optimism, several factors are holding back higher prices for the largest cryptocurrency, with several analysts predicting a drop to $50,000. Technical indicators suggest that investors may start taking profits based on the belief that the asset may have seen its biggest decline of the quarter.
They base their analysis on Bitcoin’s Adjusted Spent Output Profit Ratio, a metric used to track the gains and losses of Bitcoin’s movements relative to current prices. Since the beginning of May, the metric has risen from 1 to 1.03, indicating profit-taking by investors, but this type of action typically represents a healthy market overall rather than capitulation.
However, BTC’s net unrealized profit and loss (NUPL) tells a bleaker story, with a reading of 0.54 seen as a telltale sign of a steep market correction. A look at BTC’s 24-hour chart indicates an attempt to break out of the bullish pennant, pointing to a potential decline in the asset’s price to $55K by early July.
Perhaps the biggest threat to BTC in July is the scheduled release of funds to Mt. Gox creditors after nearly a decade of negotiations. According to industry sources, up to 140,000 BTC worth more than US$9 billion will be transferred to creditors, in a move that could upset the delicate balance of the ecosystem.
There is widespread speculation that a portion of creditors will sell their assets after receiving payment to take profits, potentially reaping nearly 20,000% in profits since the 2014 Mt. Gox hack. Previous BTC payments to creditors by exchanges have negatively impacted asset prices, with Gemini users dumping their BTC en masse in May.
“Mt. Gox about to dump $9 billion worth of bitcoin and bitcoin cash into payments. Logical selling pressure is expected, potentially taking us below 60K,” pseudonymous Deken Kid said on X. “I would expect to stay above 55K, though.”
Not all is doom and gloom for BTC
Despite all the bumps that lie ahead for BTC, bulls are still rubbing their hands in glee at the prospects of a price rally before the end of July. While the rest of the market braces for a dip, several analysts are predicting an influx of retail and institutional investors at the $55,000 mark, capable of engineering a rally of their own.
“If that happens, it’s probably the best buying opportunity you’ll ever get,” Degen Kid said. “The correction that late buyers have been waiting for, the re-entry of the major local sellers.”
BTC is currently focused on reclaiming $60,000, staving off the specter of a sub-$55,000 valuation by early July, but the leading cryptocurrency has yet to face any major obstacles to test its resolve.