Industry News Crypto Markets await a Tense End of June

Crypto Markets await a Tense End of June

June 29, 2021

Bitcoin, like any other cryptocurrency in the world, saw an incredibly volatile and tense month in June. Now, with the end of the same month’s insight, chances are that the trend will continue right until the onset of July. The reasons behind that volatility are plain to see. All of them began weeks prior to June and they simply continued into this month as well. The key element remains the situation in mainland China. There, the crackdown on all manner of cryptocurrency activity continues in a very uncertain and non-transparent way. Without missing a beat, the same development has once again infused fear and panic into the markets, especially those in the same markets who are novice traders. In many ways, the price of any individual token could do nothing besides go down and do it in a rapid and hard manner. At the same time, mass media is presenting the process with an almost endless amount of dark enthusiasm and even glee about the prospects of a crypto market collapse.

However, there are also signs of maturity and resilience, which are propping up not just the price of a BTC token, but also all other alternative cryptocurrencies. That includes several relief rallies, just like the last one which took place during the last weekend of June. Despite traditionally low volumes in this period of the week, the 48 hour period still took BTC, ETH, and many other tokens up by double digits. This in itself might be one of the strongest and thickest silver linings in the crypto market in recent years including the crash of 2018 and the subsequent onset of the Crypto Winter. But all of this is of very little use to the traders and investors who are hesitant and waiting the start of the next month and the prospects of even higher levels of crypto volatility.

Leaping Over Chinese Worries

Bitcoin managed to shrug off the developments coming from China and surge some 25 percent from its most recent low point. The news in question is the regulatory clampdown not just on crypto mining, which has been taking place for some time, but also in regards to the blockage of all crypto transactions at Chinese banks. However, despite the strong rebound from the edge of the 30,000 USD territory, the cryptocurrency is still delayed in its substantial return to good form. That comes from a heavy level of technical resistance that is located in the range between 34,000 USD and 37,000 USD.

But, all of that is still good news compared to the drop that occurred recently. That moment took the price to its lowest point in over five months. The price of the BTC token at that moment reached near 28,600 USD, according to the Bitstamp exchange. The event of June 22 got many worried and in the age of social media and esports, the same worries did not stay localized. Instead, they spread out across the online spectrum and many were certain that the slide will continue deeper into the 20,000 USD range. However, only three days later, the same cryptocurrency was once again at over 35,000 USD.

Halt to the Recovery

Despite the strong rebound that took the price to the mid-30,000 USD range, the fuel for that launch did not last any longer. The recovery stopped because of a downward trendline that saw a rejection of the price over the initial range of 40,000 for six consecutive times. These occurred one after another since mid-May and now, the same trend lines are in play. In general, trend lines present a level of resistance and support which are widely recognized by both investors and traders. They also created either a ceiling for any positive momentum or a floor on which a negative momentum can find a footing and turn from freefall into stagnation.

Each of these has its individual strength and that is enforced – or undercut – by the number of price touches and subsequent rejections or stabilization. Bitcoin recently began to show a downwards trending line of price. One failed breakout occurred in mid-June when the price climbed above 41,300 USD before dropping back below the trendline. Further worrying news that did not come from China also made sure that the same ceiling did stay in place for time being.

Emboldened Bears

These repeated failures to push the price over the 40,000 USD ceiling level meant that the bears were gaining traction inside of the collective mindset of the global trading body. They were helped not only by negative elements of the Chinese regulatory crackdown but also by the hawkish sentiment that began coming from the US Federal Reserve. The US economy has not been doing great in the post-pandemic period, which is now almost a definite thing in the country.

The cases of the coronavirus have dropped drastically and the vaccination has paid off. However, the economy is having a lot of issues coming back to the pre-pandemic levels. A lot of stimulus money that the country provided to its population built up a level of financial security. Because of that, individuals are less likely to seek out low-paying jobs, meaning that the economy is struggling to bring employment levels back. The FED is trying to balance these plates, but the results are unsure. So, the crypto markets are reacting to that process with their volatility and an inability to fully form either a bearish season or to recover the previous bull run. Still, there is a sense that the bears are waiting for their turn to drop the price to a 20,000 USD level of support.

Shot at a Bull Run Restart

It is clear that the level of 41,000 USD is a very strong ceiling right now. So, it needs to be broken by a decisive and prolonged market movement above that line. Prior to that, the level of 36,000 USD has to become a stable bottom and a launchpad for the same range. Without these two, the bears remain in place and ready to strike out, which seems equally possible for the first half of July. If successful, bears could test 25,000 USD as the next support level.

Source: Coindesk