7.1 Market Analysis - Brief Update

Trend Direction: Bullish

Technical Analysis:

Tonight, there will be a dense release of messages and data:

8:15 PM — US June ADP;

9:30 PM — Kevin Warsh speaks at the Global Central Banking Forum;

9:45 PM — US June Manufacturing PMI;

10:00 PM — US June ISM Manufacturing PMI

Although the news and data releases are very dense, overall they have limited impact on the market’s performance. Since the U.S. stock market will be closed on Friday for Independence Day, our core focus still needs to be the major Nonfarm Payrolls data brought forward to this Thursday (tomorrow).

BTC

In the early session today, it made another new low. After it broke below by more than $200, it quickly rebounded. Rather than being a downward breakout to new lows, it looks more like a market-making behavior that sweeps liquidity to the downside. The rebound behavior stopped near the rising trend line from the past few days. After that, it continued to fall and then moved sideways.

Three consecutive bearish quarterly candles—first time in history—and it has already slightly broken below the EMA20. There is a possibility that the downtrend continues, but the more likely scenario is that the quarterly candle will leave a lower wick and close bullish. The monthly MA60 and weekly MA250 have both already been hit, so there is support.

Because it has made another new low, further MACD and RSI bullish divergences have appeared across 4H, 12H, and the daily timeframe. A bullish divergence at its early stage does not necessarily mean a market reversal, but after it appears multiple times, it indicates that a reversal is getting closer. At the same time, the funding rate has fully turned positive, and the Coinbase Bitcoin premium index is also at -0.1719%. All signs point to the rebound setup being about to begin.

At this level, my personal trading bias is definitely bullish. If over the next two days we can see even further new-low divergence, or if there is a clear volume expansion that leads to a volume-price divergence, it will increase the certainty of going long.

Of course, no matter what my personal trading bias is, we still need to respect the market. Although at a larger timeframe there are already clear signs of a rebound, the direction on shorter cycles is still not clear. Also, the moving averages on the 4H timeframe and above are still pushing down with divergence. Upward and downward both show clear narrow-range box-like support and resistance. For this market to achieve a strong breakout, it needs more time to churn, or a “one bullish candle crossing multiple lines” on 4H or above. Of course, even if there is a “one bullish candle brings good fortune,” the downward-sloping moving averages will inevitably “pull back” it. But after the “pullback,” it is likely to continue upward—meaning you should take profit promptly when going long into key resistance. After the pullback, go long again at key support; specific levels will be given later based on the chart.

ETH

ETH surged into the resistance zone 1604-1636 and then fell back from the upper edge. In today’s early session, it did not make a new low. Compared with BTC, ETH is still a bit stronger. The exchange rate shows a bottoming W-shaped trend. Compared with BTC, the divergence is not particularly obvious, but since ETH liquidity is much worse than BTC’s, when we trade ETH, on the one hand we need to look at ETH’s technical indicators, and on the other hand we also need to reference BTC’s technical indicators.

Comprehensive Analysis:

The current market is still in a consolidation phase right before choosing a direction. But judging from various signs, the probability of an upward move is higher than the probability of a downward move. If you are friends who do left-side trading, you can open long positions in the near-term box support area (around 1550 and 1560). Keep leverage a little lower (2-3x is enough). For more conservative trading, wait for a pullback after the box breaks out to enter (it’s possible you won’t get the pullback and end up missing the trade). BTC’s breakout pullback level is 60700-60897. For ETH, you can refer to BTC’s level more. Personally, since I divided my position into 3 tranches, I already opened trend positions with 2x leverage (left side). Meanwhile, my short-term positions are waiting for the breakout and then a pullback before going long (right side).

In short, whether you are a conservative trader (right side) or a slightly more aggressive trader (left side), I believe the success probability of going long at this point is still higher than going short. Personally, I remain bullish, and within 2 months there is room for gains of more than 20%, even up to 30% (the process will certainly involve repeated swings).

Near the key support and resistance zones at the current position, the article from 6.29 covered it. If you’re interested, you can look it up yourself. Finally, I’ll end with a “wild guess” BTC trend chart.