Bitcoin Regains Bullish Momentum in June, But Traders Must Exercise Caution. Here’s Why

Bitcoin opened in June at $58,527 and surged to a high of $64,657. At its peak, it was up 14%, a significant change from the previous month.

However, it recently retraced and trades over 6% higher than its opening price. Nonetheless, there is a growing consensus that the pullback is temporary and the apex coin will resume its uptrend in the coming days.

The expectations are fueled by a recent increase in key metrics. One such is ETFs. According to data from SoSoValue, US spot ETFs saw a net inflow exceeding $190 millioln last week. On closer inspection, most of the inflow happened last Monday, and a significant inflow followed on Friday.

The recent shift in exchange-traded funds is noteworthy, given that the investment has been mostly bearish over the last two months. On the 1-week scale, last week was the first green after outflows dominated over the last eight weeks.

Adding to the growing list of bullish indications is the exchange reserve for stablecoin. Traditionally, when money flows out of the market, the reserve declines, but rises when the reverse happens. Over the weekend, exchanges saw an inflow of over $340 million. Interestingly, the influx is ongoing as the reserve is slightly increasing.

It goes without mentioning that Bitcoin is now seeing healthy demand. Looking back, between June 24 and July 2, Bitcoin exchange reserves grew over 20k as investors massively sold their assets. Starting on the 3rd, accumulation began, and reserves are currently declining.

With growing optimism across the market, investors are looking forward to further increases. However, there are other factors to consider.

The Bottom Is Not Confirmed

Sunny Mom noted whales have resumed accumulation, and there’s more: Bitcoin is seeing a growing number of new whales. However, the analyst warned that this does not take the asset out of the woods. She called for caution, warning that institutions are yet to flip bullish.

The Coinbase premium, an indicator for gauging institutional sentiment, is currently negative. The analyst maintained that it’s been this way for 65 consecutive days, marking its longest streak.

Away from institutions, while ETFs saw significant inflows, the spot market is grappling with a notable decline in participation. A recent report from Glassnode noted spot CVD is down, dropping from $17.2 million to -$58.6 million.  This means that traders aggressively sold last week.

There’s more; spot volume also dropped from $5.2 billion to $4.1 billion, a more than $1 billion drop. It also shows a 21% contraction in daily trading activity across exchanges.

Away from spots, Futures are also showing negative signals. While the funding rate is rising, open interest is declining. Although significant, the 0.2% drop may be the start of a massive downturn if conditions do not improve. Adding to the list of bearish indicators, the perpetual CVD. It dropped by over 81% last week. This means that traders have sharply shifted from their aggressive buying posture.

In summary, while the market is thrilled about the recent shift in ETFs, there are still a number of other factors that could hinder price growth.

It remains to be seen how prices will play out this week, but current prices suggest a bearish start to the session. Bitcoin is currently trading down by over 2% on Monday. Fundamentals lined for the next six days may add or reduce the current figure.

Bitcoin To Surge on CPI

The US BLS will release key data starting on Tuesday. The most important scheduled for the next 24 hours is the Consumer Price Index.  

Current forecasts are positive, with the median prediction being -0.2% on a month-on-month basis. It is interesting to note that this will be the first time the metric has flipped negative in years. If it comes out as predicted, it will signal a massive improvement following months of rapid increases.

There’s more; the CPI on a year-on-year basis is also projected to decline, dropping from 3.8% to 4.2%. However, core CPI for June will remain the same.

If the data comes out as forecasted, the apex coin will see massive increases. It will pull back the current losses and attempt to reclaim lost levels. Interestingly, the 1-week chart agrees with this.

Last week, Bitcoin ended the session with no significant change in value. It peaked at $64,657 and posted a low of $61,246. Prices continue to playout as predicted. Nonetheless, a look at the candle representing the previous week shows a wick sticking out of the bottom (a small FVG). The apex coin will fill this gap before any major upward push this week.

It is intriguing to note that BTC edged close to filling the gap a few minutes ago. It came less than $600 shy of filling it, which means it may still decline further in the coming hours. However, given the forecasted CPI, recovery is almost certain. It may surge above $65k on Tuesday when the data drops.

Adding to the conviction of further increases within the next two days is the bollinger bands. Over the last seven days, the apex have rebounded close to the middle band. At the time of writing, it is trading at the SMA, which means an impending rebound if the trend remains in play.

Bitcoin is not in the Clear

While in the short-term, Bitcoin will see notable increases, it remains to be seen if they will be enough to change the trajectory of spot and futures. If conditions remain the same, the largest will see massive retracements over the next two weeks.

Away from onchain data, the 1-month chart shows a low chance that June will be a massively bullish month. Paying close attention to previous movements reveals a trend; after a significantly bearish session, the candle that signals a notable green performance over the next 30 days always has a significant wick sticking out the bottom.

The chart shows several instances where the wick signalled a reversal the next month. However, the last time Bitcoin closed a red month with no notable FVG was Apr 2022, and prices dipped the next month.

The apex coin printed a candle with no notable wick in June. If the trend repeats, BTC will experience notable declines in the coming days. It may register a new year-to-date low.

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