Bitcoin Continues Losses: What Should We Watch This Week?

The main question for the coming days is whether Bitcoin can maintain its current position, especially as we approach the end of the month as it approaches the $60,000 level. 

BTC has recently dipped below several moving averages, resulting in short-term holders taking losses as the price fell below their aggregate price base. At the time of writing, the cryptocurrency's value is hovering around $61,200, reflecting a nearly 5% daily and 9.5% monthly loss.

This led to a temporary drop in demand, with particular attention paid to the activity of large investors (whales) as Bitcoin hit its lowest price since mid-May. 

The upcoming release of US unemployment data and revised second-quarter GDP data are expected to add to volatility this week.

Analysts' opinion

Popular trader Crypto Ed noted that Bitcoin looks weaker than expected and predicted further declines.

Good morning!
Back at the desk after 2 weeks of vacation and horrible PA.
BTC looks weaker than I expected and should see some more downside. Will do a YT update later this morning.

Alts: can see another leg down for ~20%

Wishing everyone a great week nonetheless! $ETHUSD $AVAX ... pic.twitter.com/XXZTJK8FRy

— Ed_NL (@Crypto_Ed_NL) June 24, 2024

Meanwhile, another trader, Daan Crypto Trades identified critical levels within Bitcoin's multi-month trading range, suggesting that if bullish momentum persists, a bounce could lead to a retest of the mid-range.

# Bitcoin Arrived at the golden pocket Fibonacci retracement level.

If there's bulls left that want to make this into a higher low then this is the spot.

A bounce should lead to a mid range retest, where failing to do so likely results in a range low retest.

Level by level 👍 pic.twitter.com/Rdf1lGzuas

— Daan Crypto Trades (@DaanCrypto) June 24, 2024

Failure may result in a retest of the range.

Factors and market sentiment

The second half of the week (June 28) will see the release of important macroeconomic data, including US jobless claims, revised QXNUMX GDP and May's Personal Consumption Expenditure (PCE) index. These data, especially PCE, are critical because they influence the policy decisions of the Federal Reserve (Fed).

Current ratings from CME Group's FedWatch tool show , that markets expect the Fed to start cutting interest rates in September, which could be considered a critical moment for cryptoassets.

Matthew Dixon, CEO of Evai, predicted that lower-than-expected PCE results could have a positive impact on Bitcoin and other risk assets.

Market is waiting for #PCE this Friday the 28th.
The #FEDs preferred measure of inflation.
I expect a lower than expected reading which should turn #BTC #Crypto #Altcoins and other risk assets higher imo. pic.twitter.com/6voFzlKAVr

— Matthew Dixon – CEO Evai (@mdtrade) June 24, 2024

Stocks vs Cryptocurrencies

Despite the poor performance of cryptocurrencies, US stocks are performing better, as last week the SP 500 reached a new all-time high. This inverse correlation puzzled many, highlighting a significant drop in short interest in major exchange-traded funds and a decline in the volatility index.

One market analyst at X (Twitter) attributed Bitcoin's sensitivity to the Fed's liquidity levels, which last week saw a $140 billion drop. The same analyst suggested that the current levels may be at or near a local bottom, which could potentially be reflected in an upcoming recovery in cryptoassets.

📉 The Net Fed Liquidity chart has now updated to reflect the big $140bn drop this week [chart 1].

It seems that Bitcoin continues to be heavily influenced by swings in Net Fed Liquidity [chart 2].

Net Fed Liquidity has dropped 2.21% this week, with bitcoin down 4.77%.

Stocks… https://t.co/e9NsnRaLyY pic.twitter.com/lkl051BSNx

— Tomas (@TomasOnMarkets) June 21, 2024

Crypto Market Sentiments

The Crypto Fear and Greed Index, which sits at 51 at the time of writing, is nearing its 2024 lows, reflecting a significant shift in market sentiment. Santiment analysts noted a heightened sense of fear and disinterest among Bitcoin traders that typically precede market rallies due to whale accumulations.

🫣 The crowd is mainly fearful or disinterested towards Bitcoin prices as range between $65K to $66K. This extended level of FUD is rare, as traders continue to capitulate. BTC trader fatigue, combined with whale accumulation, generally leads to bounces that reward the patient. pic.twitter.com/WMy3lbdjEB

- Santiment (@santimentfeed) June 20, 2024