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Bitcoin’s largest wallets recorded unprecedented net inflows following the recent market crash. These whales, who control at least 0.1% of Bitcoin’s total supply, collected $436 million worth of Bitcoin on Monday, according to crypto analysis platform IntoTheBlock. This move reflects famous investor Warren Buffett’s advice to “buy when blood is on the streets.” On June 24, the price of Bitcoin hit Mt. Gox cryptocurrency exchange is no longer operating and creditor payments are scheduled for July, falling to $58,456. This drop marked BTC’s lowest price level in almost two months and created a wave of fear in the crypto market. The Fear & Greed Index, a popular market sentiment gauge, reflected this sentiment by showing its lowest level since last September.
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During the market downturn, notorious Bitcoin critic Peter Schiff predicted further declines for the leading cryptocurrency. Schiff’s bearish outlook contributed to the prevailing negative sentiment, but also presented a buying opportunity for large investors. In addition to the bearish sentiment, the Relative Strength Index (RSI), a widely used momentum indicator, signaled that Bitcoin was oversold on daily and weekly charts. Such oversold conditions have not been observed since Bitcoin traded at $26,000, suggesting that the cryptocurrency may be poised for a relief rally.
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The combination of these factors, namely significant whale activity, oversold technical indicators, and extreme market fear, points to the possibility of a bounce in Bitcoin price. Large whales acted in anticipation of the recovery, taking the recent price correction as an opportunity to collect more Bitcoin. This strategy appeared to be successful at first, as Bitcoin price gained more than 2.2% on Tuesday, rallying to $62,004. According to pseudonymous cryptocurrency trader Rekt Capital, Bitcoin has successfully held the important support level at $60,600, which marks the bottom of the current trading range. Rekt Capital believes that if Bitcoin remains relatively stable, it has the potential to revisit the top of the current range.
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Trader James Stanley also emphasized the importance of the $ 60,000 support level and stated that Bitcoin bulls successfully defended this critical threshold. Stanley’s analysis is in line with overall market sentiment, where $60,000 is seen as an important level for Bitcoin’s price stability. The recent market crash and subsequent recovery serve as strong indicators of the resilience and strategic maneuvering of Bitcoin’s biggest investors. While the crypto market is still volatile and sensitive to external factors, the actions of these whales show confidence in Bitcoin’s long-term value. Investors and traders will be closely monitoring Bitcoin’s price movements and critical support levels in the coming days, with many expecting developments that will consolidate the current recovery or lead to new challenges.
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Bitcoin Forms Double Top Pattern Ahead of Critical Fed Data Meanwhile, BTC formed a double top price pattern that signals a potential downtrend just ahead of the release of key economic data that could impact the Federal Reserve’s interest rate decisions. Traders and investors are on high alert as this pattern is often seen as a precursor to a downtrend. Bitcoin’s price journey this month has been nothing short of a roller coaster. After reaching close to its all-time high of $70,000 set in March, BTC has now pulled back to $63,000. The pullback marks a significant divergence from the Nasdaq’s sustained upward movement. The divergence was largely due to miners selling rapidly, investors booking profits near lifetime highs, and significant outflows from U.S.-listed spot exchange-traded funds (ETFs).
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The price action led to the formation of a bearish technical analysis pattern known as a double top. This pattern consists of two peaks and a valley between them, which usually occurs after a significant uptrend. The second peak represents the exhaustion of the uptrend, and a break of the low point between the two peaks confirms the downtrend change. Markus Thielen, founder of 10x Research, explained the importance of this pattern: “Technically, Bitcoin appears to be following a double top formation, where the support level is being tested. This chart pattern should be our base case unless it is invalidated. This pattern is at $50,000—or even $45,000.” “We may see a drop to the dollar.”
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He also noted the impact of broader economic factors, saying, “Yes, the US elections and CPI could rise later in the year, but we could still see a steeper correction.” The double-top formation observed on Bitcoin’s price charts points to a potential downtrend, with the possibility of a significant price drop if support levels fail to hold. The personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation, is expected to show its slowest monthly increase in the core figure in more than three years for May. This expected slowdown could provide a solid foundation for renewed Fed rate cuts starting in September, potentially creating a floor under risk assets like Bitcoin.
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Amberdata derivatives director Greg Magadini highlighted the impact of recent economic data on digital assets. “Strong economic data boosted bond yields and pushed precious metals prices lower on Friday. This continues to be a drag on digital hard assets like crypto,” he said. Magadini also noted the importance of upcoming events: “This week, more than one Fed Governor will be speaking, we have GDP and most importantly PCE (the Fed’s favorite inflation indicator) on Friday.” Economists surveyed by Bloomberg expect no change in the PCE price index and forecast a modest 0.1% increase in core PCE, equivalent to a 2.6% annual increase in both headline and core figures. The core increase, excluding food and energy, is forecast to be the smallest increase since March 2021.
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The double top formation on Bitcoin’s price charts and upcoming Fed data have created a cautious environment for traders and investors. While the potential for a downtrend continues, factors such as a slowdown in inflation and possible interest rate cuts may support risky assets such as Bitcoin. Investors will closely monitor the Fed’s statements and economic data releases in the coming days. The interaction between technical patterns and macroeconomic indicators will play an important role in determining Bitcoin’s short-term price movements. As the market navigates this period of uncertainty, the actions of miners, institutional investors, and the overall economic environment will be important factors to monitor carefully. The double top pattern is a reminder of the inherent volatility of the cryptocurrency market and indicates that rapid price changes can occur based on a complex network of influences.