Crypto Market Update July 2, 2024

July 2, 2024
@Justin Wise
Lead Technical Analyst, Co-Founder

Bitcoin Daily Chart

Bitcoin's Daily Candle closed as a Shooting Star, and with today's close might confirm an Evening Star Pattern. This is a Bearish Reversal Pattern, however, I'm not applying much weight to this due to the fact that it hasn't occurred after a more pronounced bullish trend. While it might signal a temporary pause in Bitcoin's recovery, I'm not currently overly worried about this formation due to it occurring in a consolidation range. The longer Bitcoin consolidates here at it's lows and tightens it's range, the stronger the resulting breakout will be.

Time Transformation has just crossed above the Zero Line, which is one of the stronger Trend Following signals this indicator generates.

The Decision Point Momentum Oscillator as well is narrowing, which is an early warning sign of a potential trend reversal.

My base analysis is that as long as last week's low of $58,555 holds on spot, Bitcoin should recover back to the mid ($64,500) or top ($71,000) of it's range as the next significant movement. Closing below last week's low would be disasterous indeed, and lead to a much more pronounced and deeper correction.

Bitcoin Hourly Chart

Bitcoin formed a Double Top Pattern yesterday, which had follow through to this afternoon, as I write this update. Bitcoin traded squarely within the range of the hourly Bollinger Bands, until just two hours ago, when a red candle on high volume penetrated the lower boundary of the Bands. I entered long on this signal and added following the Bullish Engulfing candle forming a Morning Star pattern.

Resistance in the short-term lies at $62,700 - $62,850. I would like to see Bitcoin reclaim that level aggressively, if the bullish momentum is to be maintained. If we reject from that level, I will favor shorts short-term as we return to the middle or bottom of our consolidation range and highlight this recent upthrust as a failed breakout.

Bitcoin Liquidation Heatmap

The Liquidation Heatmap gives strength to our technical levels of resistance highlighted in the hourly chart above. We can see late shorters with liquidation levels from $62,529 - $62,729.

That is my short-term targets for longs picked up on this dip. If price rejects from that level, then I would favor shorting price to clear long liquidations clustered $61,677 - $61,327 before attempting to long again.

Bitcoin Footprint Chart

We can see from the Footprint chart that this recent drive down has cleared most of the aggressive Bid Imbalances that formed yesterday. It also reclaimed the opening of the large Buy candle that pushes price up close to $64,000. Now that those imbalances have been cleared, it's possible enough liquidity has been grabbed to support price making a higher push above $64,000. However, as stated earlier, if we're unable to clear short-term resistance at $62.6-$62.8k - then we will likely form another lower hourly high and descent back down below $62,000.