Bitcoin price is stuck in a tight range, stretching from $60,000 to $63,755 over the last week. Any attempts at recovery have been curtailed by stiff resistance on the upside.
Several technical and onchain indicators show that the Bitcoin price may have hit a local top, threatening further losses for the big crypto.
“It appears we are in a period of consolidation, and many analysts believe this is beneficial for a sustained bull run,” declared crypto firm Swan in a July 2 post on X.
Analysts at Swan noted that Bitcoin has highlighted its volatile nature by oscillating between $70,000 and $60,000, with two failed attempts to break above the new-all-time highs at $73,835 reached on March 14.
The firm goes ahead to explain some of the reasons they think might be behind this recent sell-off.
Data from market intelligence Glassnode shows that Long-term holders (LTHs) have been selling with the supply unmoved for at least one year dropping from 70% to 65%, and from two years, 57% to 54%.
“This suggests profit-taking after previous highs, marking consolidation periods before bullish resumptions.”
More onchain data reveals that miners have been selling their BTC after Bitcoin's halving slashed their revenues in half, while hashprice hit lows.
With profits down, Swan explains that many miners are selling their reserves to “stay afloat amid high electricity costs.”
Swan said that more sell-side pressure is coming from selling by governments with Germany, after seizing 50,000 BTC from a piracy site, sold 3,000 BTC, worth approximately $800 million at current rates. “They still hold $2.8B worth.”
Meanwhile, the U.S. government sent 4,000 BTC (~$240 million) to Coinbase from their 209,000 BTC (~$12.7 billion) stash, presumably to be sold in the near future.
From a technical perspective, Bitcoin price faces stiff resistance in its recovery path. This is the supplier congestion area stretching from $65,755 to $64,750, defined by the 100-day exponential moving average (EMA) and the 50-day EMA respectively.
Bitcoin bulls were required to push the price above this level in order to secure a recovery.
On the downside, increased selling from this supplier congestion area would add to the sell-side pressure. As a result, BTC could turn from the current levels to seek solace from the psychological level at $60,000.
Losing this level would see the price drop lower with the 200-day EMA at $58,260 and later to the range low at $56,600. This would represent a 7.5% decline from the current levels.
This pessimistic outlook is supported by the downward-facing relative strength index (RSI) and the price strength at 38 suggested that the market conditions still favoured the downside.