(Kitco News) – Bitcoin (BTC) bulls spent their morning attempting to claw back above $67,000 and hold support – only to have their progress halted at $67,320, at which point bears turned up the pressure and slapped King Crypto back down below $66,900.
BTC/USD Chart by TradingView
Stocks also opened under pressure following Thursday’s record closes for the S&P 500 and Nasdaq as the market continues to digest data from the Federal Reserve indicating that they anticipate only one rate cut this year. The two indices are still on track for a positive weekly close, but the Dow is currently set up for a weekly loss
Also dragging down sentiment was a slump in European stocks, which were headed for their worst week since October. The downturn was especially bad in France, where stocks lost roughly $200 billion in market capitalization – equivalent to the size of Greece’s economy – after President Emmanuel Macron announced his decision to hold snap elections.
The premium on 10-year French bond prices saw the biggest weekly increase on record as a result, and the financial prospects of the country appear to be on shaky ground.
Despite increased attention from politicians in the U.S. and an announcement from MicroStrategy that they intend to complete another $700 million debt offering due in 2032 – the proceeds of which will be used, in part, to purchase more Bitcoin – the crypto market remains stuck in a rut.
"Bitcoin saw another sideways-ranging week as it continued moving between 66,000 and 72,000,” said Rachel Lin, co-founder and CEO of SynFutures. “Ethereum (ETH) fared worse as it broke below the 3,700 support line, which is now acting as resistance.”
“Looking at the overall market move, we notice that Bitcoin has been down 5% since last week, and Ethereum has been down close to 10%,” she noted. “This underperformance is also reflected in the ETHBTC chart, where ETH gave up almost half of its gains against BTC following the ETF announcement.”
ETH/BTC Chart by TradingView
Lin also highlighted crypto’s underperformance relative to risk-on TradFi assets, which have continued to climb high while Bitcoin has been stuck in the mud.
“This week, the NASDAQ hit a new all-time high, buoyed by the news that U.S. inflation for May was lower than expected,” she said. “The crypto market also witnessed a substantial increase following the announcement, but selling returned soon after, pushing the prices down back to the lows of the week.”
Based on the technicals, Lin said “both Bitcoin and Ethereum look bearish, but ETH looks worse than BTC. Unless ETH reclaims the 3,700 level soon, we might see more downside in the coming days and weeks. For BTC, 67,000 remains the crucial level.”
“Another sign of weakness comes from the ETF data,” she added. “On June 4, Bitcoin witnessed a massive net inflow of over $886 million, and the price rallied by only 2.6%. However, on June 11, it saw a net outflow of $200 million, and the price fell by around 3.3%.”
Lin said this suggests “selling pressure is coming from elsewhere, as the amount of capital required to move the coin down is significantly lower than the amount of capital needed to move it up.”
“While the week may not have been ideal from a short-term portfolio perspective, it's crucial to remember that the longer-term fundamentals are still very promising. Both the major coins are hovering near their top, U.S. inflation appears to be easing, and the U.S. political climate is shifting from anti-crypto to pro-crypto,” she concluded. “This is a reminder that the cryptocurrency market is a long-term game, and it's important to focus on the bigger picture instead of hourly or daily charts.”
This point was echoed in a recent research report from Bernstein discussing the outlook for MicroStrategy as it continues to increase its Bitcoin stack. Analysts at the firm predict that the price of Bitcoin will reach a cycle-high of $200,000 by 2025, and is likely to hit $1 million by 2033.
The analysts also gave MicroStrategy (MSTR) stock an outperform rating and predicted it would climb to $2,890 over time, up from its Thursday close at around $1,484. MicroStrategy is the largest corporate holder of Bitcoin and currently holds 214,400 in its treasury after adopting King Crypto as its primary reserve asset in 2020.
At the time of writing, Bitcoin trades at $66,850, a decrease of 1.03% on the 24-hour chart.
