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▲ Bitcoin (BTC), rise / ChatGPT generated image
Bitcoin (BTC) and the cryptocurrency market stand at a critical inflection point ahead of July. Amid analyses suggesting that the correction after quantitative tightening (QT) is nearing its end, the Purchasing Managers' Index (PMI), Russell 2000, and the flows of copper and gold are being cited as reversal signals.
Cryptocurrency-focused YouTube channel Altcoin Daily analyzed in a video uploaded on June 27 (local time) that the cryptocurrency market is reacting more sensitively to economic cycles and liquidity flows than to simple four-year cycles. The video presenter identified Bitcoin and cryptocurrencies as the last domino in the risk asset class. They explained that these assets are the last to fall during an economic contraction and move the strongest during an economic expansion.
The presenter believed that the normalization adjustment after quantitative tightening, which had been warned about throughout the year, has already occurred. In the previous cycle, cryptocurrencies began to turn upward approximately 189 days after the end of quantitative tightening. Currently, about 203 days have passed since the end of quantitative tightening. He stated, “The adjustment after quantitative tightening is coming to an end.”
July was presented as the first test for this economic cycle theory. Out of the last 11 Julys, 8 saw an increase, while only 3 saw a decrease. All three Julys that saw a decrease followed a June that closed with a rise. The current market is in an oversold zone and is assessed as a phase where PMI expansion and the end of the adjustment after quantitative tightening align.
Technical indicators also mentioned signals supporting the possibility of a rebound. The presenter explained that the Relative Strength Index (RSI) showed a structure of creating higher lows after entering the oversold territory. He pointed out that this trend resembles the period after quantitative tightening in 2019 and the bottoming out in 2022. The Russell 2000 breakout and the reversal of copper and gold were also interpreted as signs of risk asset recovery appearing earlier than cryptocurrencies.
However, the presenter did not conclusively predict a July rebound. He left open the possibility that the bearish trend could continue into July or August. The key point is that it is a period where the end of quantitative tightening, a correction lasting over 200 days, PMI expansion, Russell 2000 breakout, and long-term altcoin suppression are all aligned. The video concluded that the cryptocurrency market has entered a phase from July to actively confirm whether the economic cycle is reversing.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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