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Bitcoin Price Dips 3% in June – Will the Month End on a Bullish or Bearish Note?

Published June 20, 2024 9:19 AM
Valdrin Tahiri
Published June 20, 2024 9:19 AM

Key Takeaways

  • The Bitcoin price increased 11% in May but has fallen so far in June.
  • There is an ongoing distribution from long- to short-term holders.
  • Will BTC bounce to close out June or will it continue falling instead?

The Bitcoin price has fallen since June 7, when it reached a high of nearly $72,000. The decrease has been swift and took the price below numerous horizontal support levels. The movement has been marked with on-chain distribution from long- to short-term holders.

While there are some short-term bullish signs in place, it remains to be seen if they will be enough to counter the negative outlook from the weekly and monthly readings.

Bitcoin Price Shows Weakness, Cannot Follow May’s Increase

The BTC price bounced in May (green icon), creating a bullish candlestick in the monthly time frame and increasing by 11%. The bounce was also important since it validated the previous all-time high region of $60,000 as support. 

However, Bitcoin has failed to sustain the increase so far in June. Rather, it created a small bearish candlestick (red icon), which albeit is still comfortably contained inside the previous bullish one.

Bitcoin Monthly Movement
BTC/USD Monthly Chart | Credit: Valdrin Tahiri/TradingView

While the monthly time frame gives a mixed reading, the weekly one leans bearish. This is because Bitcoin struggled to break out from the $69,500 resistance area, creating several long upper wicks. A bearish engulfing candlestick then ensued (red icon), confirming the deviation above the $69,500 resistance area. 

To further add to the bearish sentiment, the weekly MACD has made a bearish cross and the RSI is trending downward, falling below 70 (black icons). These all point to an ongoing BTC price correction.

Bitcoin's Weekly Movement
BTC/USD Weekly Chart | Credit: Valdrin Tahiri/TradingView

Finally, the daily time frame Bitcoin price chart also leans bearish. BTC broke out from a descending parallel channel in May and validated it as support afterward. However, it could not sustain the increase and has fallen back inside its confines. This aligns with the bearish readings from the weekly time frame and implies the BTC price is correcting.

Bitcoin's Daily Movement
BTC/USD Daily Chart | Credit: Valdrin Tahiri/TradingView

The only silver lining is that the daily RSI has fallen to 40. The only other times it has fallen below this level this year (green lines) have marked the absolute Bitcoin price bottoms.

Age of Transacted Coins

The Mean Coin Age on-chain indicator tracks the age of coins transacted over a specific period. The 365-day MCA specifically tracks the age of all Bitcoin transacted in the past 365 days. A higher value indicates that buyers from the specified time period are holding, while a lower one shows that transactions are occurring.

The chart below shows the shorter-term MCA of 180 and 365 days (red) and the longer-term ones of three and five years, respectively (blue).

The observation from the chart is that long-term holders have been selling since November 2023, while there is a distinct surge in short-term purchases since March 2024. Currently, the short-term MCA is at an average of 90 days while the long-term one is at 480 days.

As a result, there is ongoing distribution from long- to short-term holders.

Mean Coin Age
Mean Coin Age Indicator | Credit: Valdrin Tahiri/Santiment

However, this is not yet similar to the distribution of previous market cycle tops. The Realized Cap HODL Wave indicator can help visualize the percentage of coins being transacted. In the 2017 and 2021 market cycle tops, the amount of BTC that was transacted in the past 3 months (red) reached values near 80%. Compared with the previous indicator, this implies a shorter mean coin age.

In turn, there is a reduction in coins that have not moved for the past 2-5 years (green). Currently, the short-term HODL Waves (red) are at roughly 40%, while the longer-term ones are at 20%. This is a far cry from the 70-80% and near 0% of these same HODL waves in the previous market cycle tops.

HODL Waves
RCAP HODL Waves | Credit: Valdrin Tahiri/Glassnode

So, on-chain indicators imply there is an ongoing distribution from long- to short-term holders. However, the scale of the distribution does not yet resemble that of previous market cycle tops.

Bitcoin Price Prediction: What to Expect for the Rest of the Summer

Because of the ongoing price decrease, the bearish long-term count is now the primary one. More specifically, the count suggests that BTC is in wave four (white) of a five-wave increase that started in November 2022. 

The exact shape of the correction is not yet clear. However, since wave four most often develops into a triangle, this is the primary outline for the correction.

If so, BTC is completing wave C in this triangle. After more consolidation, a breakout can happen near the end of the summer, starting the fifth and final upward movement.

It is worth mentioning that the ascending support trend line slope has not been established yet, given that there’s only been a single touchpoint so far. The 0.618 Fibonacci retracement support level at $62,490 is a likely level for a bottom, so the slope touches it.

Wave Count
BTC/USDT 3-Day Chart | Credit: Valdrin Tahiri/TradingView

Alternatively, the bullish count suggests the price ended its correction on May 1 and started a new upward movement. The first portion of this increase (black) has ended along with its ensuing short-term corrective structure (white). 

In this count, wave C ended at the 0.5 Fibonacci retracement support level of $64,150 and took the shape of an ending diagonal, as evidenced by the descending wedge pattern. 

Short-Term BTC Movement
BTC/USDT 4-Hour Chart | Credit: Valdrin Tahiri/TradingView

The bullish divergence in the RSI and MACD support this count, combined with the short-term price action. However, the bullish indicators are too short-term and lack long-term support to make this the primary count.

The Bitcoin price today could go a long way in favoring this count by breaking out from the wedge.

More Consolidation Ahead for Bitcoin

The Bitcoin  price casts doubt in its bullish trend with its dull performance in June, invalidating the breakout from May. 

Long-term readings suggest the price is correcting, and so does the wave count. However, the count predicts that the worst part of the drop is over and the BTC price will consolidate for most of the summer. 

Afterward, a breakout from the long-term triangle will confirm the bull run’s resumption.

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
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