Crypto Market Update June 21, 2024

June 21, 2024
@Justin Wise
Lead Technical Analyst, Co-Founder

Bitcoin is currently trading it's fifth consecutive bearish day, following yesterday's Inverted Hammer Candle bearish closure.

Bitcoin overall remains in a range. Our Primary Trend remains bullish, indicated by the upsloping DEMA 200 - and we could debate for hours on whether what we are witnessing is distribution or re-accumulation.

With On-Chain Analysis, it does seem to confirm that this area has been one of distribution, as we've seen a large amount of Long-Term Holders distribute significant portions of their Bitcoin. Again, this is also in line with previous cycles, when we've seen lots of distribution at local tops, a long period of ranging, a bearish movement (20% - 30%), then a bottom and eventual recovery and new highs.

That is my base case, but as stated yesterday, the bulls were unable to hold critical support and we have broken down.

Analyzing the Volume Profile, we can see the current 'Fair Price' of Bitcoin within this range is $67,500. As we are in a range, Bitcoin will oscillate between the Value Area Low $60-55k and the Value Area High ($69-$72k).

Bitcoin Daily Chart

Successfully trading in a range requires identifying these Value Areas, and correctly entering positions when price reaches them.

I believe having lost this important level, it's fairly clear we will re-visit the Lower Value Area inevitably, however I do see that the Volume Profile drops off shortly below $62.6k.

It is possible that we do indeed see a reversal before the Value Area Low range is reached, as I've stated - pushing price higher to trap longs before a sharp move down.

However, as we are by default Trend-Following Traders, we need to be careful with such moves.

First things first - capital preservation. I remain in cash, as now is not the time to begin loading up spot Bitcoin. For the time being, we will keep our trades short-term and surgical, and wait for strong signals before committing more capital.

Volume has continuously declined in this range - showing the waning interest of trading Bitcoin in general.

Mynx indicates that we are getting quite Oversold, however we have not reached an extreme yet. The time is approaching for a more committed mean-reversion position, but not yet.

Bitcoin Liquidation Heatmap

The Liquidation Heatmap shows that after grabbing a good chunk of Long Liquidations below $64k, price reversed to Liquidate late shorters at $64.3k.

Long Liquidations are quite stacked down to $63k - for those looking for short-term opportunities I would wait for those levels to clear before attempting to long again.

There is an $8.44M order on the books at $63,000 - again as we've seen it's likely price drives down to clear the liquidations above that, and that price level will act as short-term support. Opportunities for short-term long positions exist should that level be tested.

Bitcoin Large Limit Orders

Looking at the Footprint Chart, we can see Aggressive Selling came into the market at the price lows of $63.3k, this was the primary reason for the sharp reversal in price we just saw to liquidate them.

Aggressive selling has again come into the market at $63.7k - $66.9k - and $64.1k.

Bitcoin Footprint Chart

We will likely see these positions tested today.

Trade safely - and general recommendations:

Don't short unless you see a lot of short liquidations come in and price pushes higher - $63.8 - 64.2k.

Don't long unless you see a lot of long liquidations come in when price sweeps liquidity closer to $63k.