Bitcoin Faces Resistance at $65,000: Short-Term Traders to Break Even, Highly Leveraged Shorts at RiskBitcoins price is attempting to recover from its June slump, but on-chain data suggests it may face resistance around the $65,000 level. While historical data shows Bitcoin usually exhibits a strong rebound in July, technical analysis and on-chain metrics indicate any rally this month could be capped by selling pressure at the $65,000 mark
Bitcoin Faces Resistance at $65,000: Short-Term Traders to Break Even, Highly Leveraged Shorts at Risk
Bitcoins price is attempting to recover from its June slump, but on-chain data suggests it may face resistance around the $65,000 level. While historical data shows Bitcoin usually exhibits a strong rebound in July, technical analysis and on-chain metrics indicate any rally this month could be capped by selling pressure at the $65,000 mark.
Technical Analysis and On-Chain Metrics
Data from Cointelegraph Markets Pro and TradingView shows that Bitcoin (BTC) dipped to $62,063 and is currently trading at $62,288, down 0.5% in the last 24 hours and 8.6% in the last 30 days. The June sell-off continued, wiping out all gains from May.
The daily chart reveals strong resistance for Bitcoin on its recovery path. This resistance lies between $61,817 and $56,914, corresponding to the 100-day Exponential Moving Average (EMA) and 50-day EMA, respectively.
"In the short term, we should expect some resistance at the $65,000 level as short-term market speculators will likely look to exit positions at the 'break-even' level," noted analysts at Blockware Intelligence in their latest newsletter. They also pointed out that last summer, Bitcoin traded sideways for two months when it lost the realized price support of short-term holders (STHs) before eventually breaking out again.
Short-Term Holders' Cost Basis and Potential Sell-Off Pressure
The June decline has pushed Bitcoin's spot price significantly below the widely tracked STH cost basis, raising concerns about a deeper correction. According to LookIntoBitcoin data, the cost basis for short-term holders stood at $64,513 as of June 28, while the spot price hovered around $60,317. The realized price or total cost basis represents the average price at which the tokens were last used on-chain.
This means short-term holders are now facing losses and may try to exit the market at a loss or break-even price, potentially adding to selling pressure around the $65,000 level.
Independent analyst Ali Martinez corroborated this view in his analysis on X, stating that based on the market value to realized value metric, BTC price could face resistance above $65,000.
Coinglass's Bitcoin one-month liquidation heatmap further supports this argument, showing a sell-side order at $64,940 with a volume of $1.23 billion.
Potential Risks for Highly Leveraged Shorts
While short-term traders attempting to break even at $65,000 could exert downward pressure on Bitcoin's price, highly leveraged shorts also face significant risks. If Bitcoin breaks through $65,000, these highly leveraged shorts could get liquidated, potentially further pushing the price upwards.
Thomas Fahrer, founder of cryptocurrency firm Apollo, is optimistic about Bitcoin's chances of breaking through $65,000. He pointed out that $940 million worth of Bitcoin shorts would be liquidated at the $65,000 level.
Historical Data and Potential Upside
Despite technical analysis and on-chain indicators suggesting potential resistance at $65,000, historical data shows that Bitcoin has generally performed well in July. According to Coinglass data, when Bitcoin experiences negative growth in June, it often sees a strong rebound in July. In fact, the average return for BTC in July is 7.98%, with a median return of 9.60%.
If Bitcoin breaks through the $65,000 resistance, it could further rise to $78,700, Ali Martinez stated.
Conclusion
Bitcoin is currently attempting to recover from its June slump but is likely to face resistance around $65,000. Short-term traders seeking to exit positions at the break-even level could exert downward pressure on the price, while highly leveraged shorts are at risk of liquidation. Historical data suggests Bitcoin typically sees strong rebounds in July, but this would depend on its ability to break through the $65,000 resistance level.
Other Factors Worth Watching
Beyond technical analysis and on-chain metrics, the following factors could also influence Bitcoin's price movement:
- Macroeconomic Environment: Macroeconomic factors such as global economic slowdown, rising inflation, and Fed interest rate hikes could impact market sentiment.
- Regulatory Policies: Changes in regulatory policies towards cryptocurrencies by governments could affect Bitcoin's price.
- Institutional Investment: Growing interest in Bitcoin from institutional investors could drive price appreciation.
- Market Sentiment: Market sentiment could influence investors' confidence in Bitcoin, impacting its price trajectory.
In conclusion, the future price trajectory of Bitcoin remains uncertain. Multiple factors, including technical analysis, on-chain metrics, historical data, and macroeconomic factors, will influence price fluctuations. Investors need to pay close attention to these factors and make informed investment decisions based on their individual circumstances.
Here are some additional points for a deeper understanding of Bitcoin's resistance at $65,000 and potential trend shifts:
- Bitcoins Volatility: Bitcoin is a highly volatile asset, and its price can move up or down rapidly. Therefore, investors need to be mentally prepared and not be swayed by short-term fluctuations.
- Investment Risks: Investing in Bitcoin involves risks, and investors may lose all or part of their investment. Investors should invest based on their risk tolerance.
- Long-Term Investment: Bitcoin is considered a long-term investment, and investors need to be patient and not be influenced by short-term fluctuations.
- Technological Developments: Technological advancements in Bitcoin, such as the adoption of the Lightning Network, could impact its price trajectory.
- Social Acceptance: Increased social acceptance of Bitcoin, such as more people accepting Bitcoin payments, could impact its price trajectory.
Finally, it's important to remember that investment advice should come from qualified financial advisors and should be tailored to your individual circumstances.
Disclaimer: The content of this article is sourced from the internet. The copyright of the text, images, and other materials belongs to the original author. The platform reprints the materials for the purpose of conveying more information. The content of the article is for reference and learning only, and should not be used for commercial purposes. If it infringes on your legitimate rights and interests, please contact us promptly and we will handle it as soon as possible! We respect copyright and are committed to protecting it. Thank you for sharing.(Email:[email protected])
