Bitcoin recently closed at $58,500, its lowest point of the quarter, and the explanation that many analysts came to was the high pressure, the outflow of ETFs and the fear of institutions. Gareth Soloway, Chief Market Strategist at Verified Investing, they have a very different reading people never thought about it. A large part of last week’s selloff had nothing to do with Bitcoin’s fundamentals and everything to do with fund managers cleaning up their quarterly statements.
Opening the Window No One Said
At the end of each quarter, institutional investment managers make their portfolios look better before sending statements to clients. They buy what worked and quietly discard what didn’t. Bitcoin ETFs, after suffering from quarter to quarter, became the obvious candidate to get rid of these words before customers saw them.
Bitcoin fell while AI-related stocks like SanDisk rose nearly 11% in one day. The first day of Q3 told the same story in reverse. SanDisk started selling immediately as the new quarter opened, while Bitcoin held up even as the stock market was pointing lower. The pressure on trading institutions that weighed on Bitcoin until the last days of June may already be over.
Bitcoin is now up by 5%.
A Multi-Technical Event Is Missing
Moving on to the last machine, Soloway noticed something very important about the chart that wasn’t noticed in the general information.
Bitcoin has moved into what they call Phase Two of the bear market, and it’s actually a better development than it sounds.
The first phase of a bear market is the period that is below the first line of the downtrend connecting the lows from the all-time highs. Bitcoin spent several months locked in the sector. The Second Phase begins when the price falls above this line, even if it is at a very low level. This change shows that the bear market is no longer at the beginning. The market is in the back half, closer to the end than the beginning.
The Head and Shoulders Question
Many technical experts are looking at the latest Bitcoin chart showing a head and shoulders pattern, a pattern that is associated with further declines. Soloway made a point that needs to be understood before drawing conclusions from the setting.
A reliable head and shoulders pattern consists of horizontal or slightly upward lines. Bitcoin’s current structure is down-sloping neck, which reduces the probability of the sample to achieve a success of approximately 50/50 on the best, compared to 65% to 70% of the probability that horizontal or upward-sloping Bibles carry. It can still happen. It is not a typical bearish signal that is being treated as.
Where Does Bitcoin Go From Here?
An effective meeting is possible and the elimination of the pressure of the last sale gives more opportunities. However, if Bitcoin breaks below the current support, the next downside could be looking at the low price of $50,000, a level that corresponds to the technical support of the higher periods.
The most important thing for anyone following the market is that the relentless sell-off that marked the final weeks of Q2 may be behind us. Whether it is enough to create a real meeting in July, as the weather indicates, or if the decline of one leg arrives first, then the question Q3 will answer.
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