Abnormal Bullishness in June. Outlook for July


  • With mainstream Wall Street institutions gradually entering the scene, the impact of the Federal Reserve on the cryptocurrency market will gradually diminish.
  • We believe that the second half of the year is more likely to see a slow bull market similar to the one after the 2008 US stock market, with a target range for Bitcoin at $34,000 to $36,000.
  • The magnitude of the rebound corresponds to a relatively weak increase in volatility, indicating that in the long term, we can expect a larger bull market to follow.
  • Bitcoin is at the top of its trading range, $31,000. We are biased to the upside with an invalidation level of $28,500.

Macro Analysis

Expectations of Interest Rate Hikes Remain Strong

Federal Reserve Chair Jerome Powell delivered a significant statement on inflation during a forum held on Wednesday, expressing his anticipation of multiple interest rate hikes in the future, potentially at an accelerated pace. He emphasized the Federal Reserve’s intention to adopt more stringent monetary policies. These remarks align with the position taken by other Federal Reserve officials during the June policy meeting, where they projected a total of 50 basis points worth of interest rate increases by the conclusion of 2023, implying the occurrence of two additional rate hikes.

However, there is currently a noticeable discrepancy between the market and the Federal Reserve. The data from the CME Fedwatch Tool indicates that the market is pricing in a 25 basis point interest rate increase in July, followed by an expectation for the Fed to halt further rate hikes and potentially even start reducing rates in early 2024.

When comparing these market expectations to the more hawkish stance of the Federal Reserve, it becomes evident that the market outlook is overly optimistic. We believe that, ultimately, either the market or the Federal Reserve will be proven incorrect. In the event that the Federal Reserve is proven wrong, they may adopt a more dovish approach, providing guidance for more accommodative policies and potentially leading to an earlier rate cut. Conversely, if the market is proven wrong, a market correction is likely to occur.

Market Facing Difficult Choices

Inflation continues to show signs of moderation, as reflected in the US core PCE price index, which rose 4.6% year-on-year in May, slightly below the expected increase of 4.7%. Additionally, personal consumption expenditures in the US grew by 0.1% in May compared to the previous month, falling short of the anticipated 0.2% growth. This decline in inflation contradicts the earlier signals from economic data, which suggested strong economic resilience and the need for further interest rate hikes by the Federal Reserve.

The market finds itself in a quandary, grappling with this contradiction. Previously, high inflation and weak economic data did not support additional rate hikes. However, with inflation easing while the US economy remains robust, the data now aligns with the case for further rate hikes. The disparity between inflation and economic data leads us to believe that either inflation or economic data will be proven inaccurate, and the market will eventually establish a clear short-term trading direction.

Outlook for the Second Half of the Year

Our previous viewpoint remains unchanged: as mainstream Wall Street institutions gradually enter the cryptocurrency market in the second half of the year, the market consensus on cryptocurrencies will strengthen. Already, several funds have invested in Bitcoin trusts or ETFs, and we believe that ETFs could serve as the catalyst for a significant bull market in the cryptocurrency space. The overall market volume in the crypto sphere will continue to expand, leading to a notable improvement in liquidity. However, the likelihood of unilateral surges in mainstream cryptocurrencies is decreasing, making a slow bull market similar to the one observed after the 2008 US stock market more plausible in the second half of the year.

Nevertheless, we acknowledge that substantial profits must accompany the improved liquidity for the market to experience a true dual explosion of capital and sentiment. We anticipate the return of more favorable on-chain data indicative of a healthy bull market. This would also help reduce the excessive reliance of the cryptocurrency market on the Federal Reserve’s easing policies, gradually diminishing the Fed’s influence on cryptocurrencies. Therefore, even without expectations of interest rate cuts, we maintain confidence that our target range of $35,000 to $36,000, set at the beginning of the year, remains achievable.

Fundamental Analysis

Looking at the implied volatility index, DVOL, we can see that the market has experienced a strong rebound recently, but the increase in volatility has been relatively weak. This indicates that the market participants have not completely shifted towards options buyers, and it also suggests that the current market sentiment is not heavily speculative, with fewer retail investors involved. Therefore, there is still some distance between the current market state and the anticipated major bull market. In the short term, due to the rapid previous increase, a correction is likely to occur. However, in the long term, we can expect a larger bull market to follow. We still believe that the target range of $35,000 to $36,000 for this year is achievable.

Technical Analysis


Bitcoin experienced a period of consolidation during the past week, indicating that price movement has been relatively stagnant. Typically, after a rally, one of two scenarios occurs: either there is a pullback in price or a period of consolidation, during which traders position themselves for the next market movement. Currently, we are observing a lack of significant price action, indicating a state of equilibrium between buyers and sellers without any notable developments in the market.

Last week, we expressed our belief that Bitcoin was somewhat overextended, as evidenced by the elevated score on the fear & greed index and the divergence between price and RSI (Relative Strength Index). Our suggestion to execute a Covered Gain strategy on both ETH and BTC expired without being executed, but it allowed us to lower our overall cost average. We maintain the view that the market is currently overextended and will likely require a brief period of consolidation or a shallow pullback.

Nevertheless, we maintain our year-end price target of $34,000 – $36,000, which we projected in January 2023.

Bitcoin currently remains at a critical resistance level of $31,000, and our bias leans towards a continuation of its upward trajectory and a breakout from this range due to promising fundamental developments. However, trading at extreme levels entails inherent risks, requiring quick and decisive action if proven wrong. Our levels from last week are reiterated, with a key support level at $28,500 that we hope Bitcoin will hold; a breach below this level could lead to further downside and a return to the $25,000 to $31,000 trading range. Alternatively, we anticipate consolidation above $30,000 followed by a break above $31,000 after a period of time, indicating relative strength and paving the way for the rally to persist, ultimately reaching our target of $34,000.

Consolidation for the past week

The seasonality of Bitcoin prices is quite intriguing. On average, May and June have tended to be unfavorable months for Bitcoin. Approximately 50% of the time, either June or May results in a negative performance. However, this year, we witnessed a significant 13% increase in Bitcoin’s value during June, which deviated from the historical pattern.

In contrast, July has typically been a positive month for Bitcoin, with an average increase of 11% over the years. If historical trends hold true, and we manage to achieve this average growth, Bitcoin will reach our projected target of $34,000.

Bitcoin Seasonality

One thing that makes sense and is interesting to note is that Bitcoin, for the last two weeks, has experienced its strongest rallies during U.S. trading hours, a sign that U.S. institutions are buying Bitcoin while other regions are less active. This is due to the bullishness from institutions after Fidelity and Blackrock filed for Bitcoin ETFs.

BTC price return by Continent


ETH has been lagging behind Bitcoin as the focus of positive news has primarily centered around Bitcoin ETF filings. However, in recent days, while Bitcoin has taken a breather, liquidity has flowed into ETH and other altcoins instead. ETH is now approaching a critical pivot level of $1,930, which has been tested multiple times in the past, often resulting in rejection. However, this time, the situation appears different. Positive sentiment surrounding the crypto market is providing support, and we have observed the formation of a doji candle right at the pivot point. If we see a follow-through green candle that closes above $1,930, our next target becomes the year-to-date high at $2,100, followed by $2,500.


the ETH/BTC pair is demonstrating strong performance, as it has successfully reclaimed the double bottom that it previously broke down from during the Friday session. This development is highly encouraging and indicates a constructive market outlook, particularly if ETH can sustain this level. If it manages to do so, it would signify a failed breakdown, a bullish signal. As Bitcoin enters a consolidation phase and takes a brief pause, we may witness ETH and other altcoins outperforming, benefiting from increased investor interest and attention.

Trading Recommendations


Continuing our previous recommendation, utilize the Take Profit feature in the Pionex dual-currency wealth management product. For Bitcoin, consider taking profits on 10% to 20% of your position if it is substantial. Choose a product with a 1-day expiration and a target price of $31,000, which can provide an annualized return of up to 80%.

If you prefer to hold onto your coins for potential gains at higher levels and also seize opportunities to buy at lower prices, we recommend selecting a product with a 5-14 day expiration and a target price of $32,500. This corresponds to an annualized return of over 21% and offers a stable and rewarding return in Bitcoin terms.


For Ethereum, if you have a substantial position, we recommend taking profits on 5% to 10% of your position promptly. Choose a product with a 2-day expiration and a target price of $1,925, which provides an annualized return of over 250%.

If you prefer to hold onto your coins for potential gains at higher levels and also seize opportunities to buy at lower prices, we recommend selecting a product with a 7-day expiration and a target price of $2,050 or $2,100. This corresponds to an annualized return of around 15% and offers a stable return in Ethereum.

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