Bitcoin Trades Within Descending Channel as CME Gap Gets Filled

Bitcoin’s price action since May 22nd reveals a persistent bearish trend contained within a descending channel. The initial peak of $112,000 triggered a roughly 10% decline to approximately $100,000. A subsequent higher high at $110,000 on June 10th was followed by another 10% correction, briefly pushing the price below $100,000 amidst market volatility related to the U.S.-Iran conflict.

By June 30th, Bitcoin reached approximately $109,000 before experiencing a 3% pullback. However, it has since recovered to nearly $108,000, indicating a potential shallowing of recent price dips. The latest dip notably filled a CME futures gap around $106,000, a phenomenon where a price range with no trading activity (often created during overnight or weekend closures of the Chicago Mercantile Exchange) is subsequently filled by price movement.

Analysis of on-chain data from Glassnode reveals that Bitcoin’s recent pullbacks have been relatively shallow, with the price consistently remaining above its 1-month realized price. This realized price represents the average price paid by investors over the past 30 days. Currently, investors hold an average cost basis of $105,600 over the past 24 hours and $106,300 over the past week. These short-term holders are currently in profit, suggesting underlying market momentum.

However, continued profit-taking poses a potential challenge to Bitcoin’s ability to achieve new all-time highs. The recent decline in the CME futures premium further hints at a potential waning of institutional investment appetite, adding another layer of complexity to the near-term price outlook. The descending channel pattern, coupled with these factors, suggests a cautious outlook for Bitcoin in the short term, although the shallowing dips and positive cost basis for short-term holders provide a degree of support. Further observation is needed to determine if this trend will continue or if a significant bullish reversal is imminent.