Crypto Coin Network Report:
Yesterday, BTC saw a downward spike, approaching 53k at one point, before rebounding autonomously to above 56k as of now. The crypto market experienced a broad sell-off, dropping from a local high of 63.8k on July 2nd to a low of 53.3k on July 5th, with a modest decline of just 16% over the 4-day period. Compared to the events of “519” in 2021, where BTC dropped significantly from a local high of 59.5k on May 10th to a low of 29k on May 19th, marking a staggering 51% decline, the impact of “75” (July 5th) seems relatively minor.
Bitcoin now stands precariously close to the 50k mark, with only robust support remaining, indicating substantial bearish strength. Breaking below this level could usher in a new era in the 40k range. Has the bottom been reached now? No, it is likely there will be a prolonged period of testing lows and seeking support, hence after any rebound, further downward waves may follow. In the short term, 58,800-60,000 has formed a strong resistance zone. Ethereum has repeatedly retraced towards the 2,800 level, with a potential further decline towards 2,300 if it breaks below 2,750, a scenario with high probability. In the short term, 3,160-3,200 has formed a strong resistance zone.
Currently, the only solace lies in the prospect of acquiring cheaper assets in the future, trading time for space, thereby setting the stage for future highs. Altcoins have little prospects this year; their prices peaked in March and, though many are now at rock-bottom prices, there’s still a long way down. Wait for daily chart bottoms before considering further altcoin purchases.
Looking ahead, if Bitcoin fails to reclaim 63,000 within 1-2 weeks (the starting point of this downturn), the likelihood of prolonged sideways movement seeking support will increase. Following this recent high, almost 4 months of sideways movement has revealed sustained selling pressure at higher levels. If the macroeconomic environment in the US does not improve post a 4-month plateau, it’s almost certain Bitcoin will continue seeking support, with the next level potentially at 42,000-45,000, a grim prospect that could signal a bearish trend reversal, something nobody wants to see.
Alternatively, current selling pressure stems from various sources: Mt. Gox’s settlement of 140,000 coins, the German government’s 40,000 coins, miners, 2 million coins of circulating tokens, continued minor ETF outflows, and rumors circulating in the community.
These combined forces have orchestrated this current downturn, but with over 75% of mining machines now reaching shutdown prices and only recent batches of new machines in operation, amidst declining hash rates, the likelihood of Bitcoin continuing its downward spiral remains very low—historically unprecedented and contrary to the interests of whales, institutions, governments, miners, and mining farms. From this perspective, the probability of Bitcoin reclaiming above 63,000 is higher than dropping to the 42,000 zone. Historically, every downturn in the crypto market, marked by panic selling and pessimism, has provided short-term rebound opportunities. This time should be no different; the key is to observe the strength of the rebound. The faster the recovery, the stronger the rebound, and the more optimistic the outlook. Conversely, if stagnation replaces recovery, then apologies, but we may see levels below 50,000 again!