It’s the beginning of July right now, and Bitcoin is fluctuating at around $6,600. June has been a difficult month for the largest cryptocurrency out there because, on June 29, BTC fell to the lowest level since Nov 2017, meaning that this year we haven’t seen the rate trading lower than that. The recent downtrend started in April when Bitcoin left the $10,000 level, but it got steeper in June after several unfavorable news and events.
First, South Korean crypto exchanges Bithumb and Coinrail got hacked. Bithumb is SK’s second largest crypto exchange, and it saw $30 million in cryptocurrency disappearing from users’ accounts. All deposits and withdrawals were ceased for a while, and the crypto market was under pressure.
The second wave of pressure came when Japanese financial watchdog ordered six local crypto exchanges to improve their systems, including their largest exchange – bitFlyer. The operators said that it wouldn’t add new users until the problems were solved.
This was the news that hit Bitcoin to its lowest level year to date. It touched $5,845 according to Coinmarketcap data. On major crypto exchanges, it fell below $5,800.
However, it seems that Bitcoin could go even lower than that. Mark Newton, the founder of Newton Advisors, said in an interview with CNBC that BTC could touch $5,000 in a few weeks, which means this July. He stressed that cryptocurrencies are sensitive even to minor news, which can result in massive sell-offs.
“In this choppy range with low volume, it just takes one bout of selling and the entire space goes down. There’s just a lack of interest, there’s a lack of buying, and the sellers are dominating the marketplace,” he said.
An author at Forbes magazine also noted that $5,100 might be the next support level for Bitcoin. The last time when Bitcoin traded that low was in October 2017, when the cryptocurrency was raising demonstrating its super rally.
At $5,845, everyone was ready for Bitcoin to move towards $5,000, but it suddenly changed direction and consolidated above $6,500. By the end of July, Bitcoin might try to reach the $7,000 mark again, especially if no bad news will show up. However, if another unfavorable news suddenly makes the headlines, then we might see an updated YTD low. At this point, the crypto market is not mature, and each decision coming from a regulator or government has an enormous impact.
The most rational prediction under these conditions (no major news) is that Bitcoin will end the month in the range of $6,000-$7,500, moving without significant ups and downs. This is not a great period to actively trade Bitcoin – investors should better hold it for longer periods. At the end of the year, we might see another great rally – maybe similar to what we had in December 2017 – as traders will become more active after the summer and vacations. Most of the time, Bitcoin demonstrates a bullish rally at the end of the year:
Anyway, if July brings another “lowest level of the year” – it’s a good time to buy – it’s basically a discount price.