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Bitcoin rallied strongly following the softer-than-expected US inflation data, reaching our $65,700 major resistance before seeing some profit-taking.
So far, there's nothing unusual about this move.
After a strong rally, it's common to see traders lock in profits while the market tests whether buyers are willing to absorb that selling pressure. That's exactly what we're seeing now.
The important thing is that Bitcoin is still holding above the $64,000 support/resistance flip.
As long as this level continues to hold, the overall market structure remains constructive.
The next major test is still $65,700. A confirmed breakout above this level would be a strong technical signal and could open the door for another leg higher.
If Bitcoin loses $64,000, we'd expect a move back towards $63,000, where previous support sits. Below that, $61,000 remains the next major level, followed by the stronger demand zone between $59,000 and $59,500.
- Yields are going up. - Oil is going up. - Nasdaq is going down.
There's also a clear bearish divergence (and bullish divergence) at play.
Matter of question of which one is going to be the valid one, but if you'd ask me right now, I'd go for the fact that we're going to see a breakdown here beneath $61,000 and make a triple bottom/divergence in July.
Ultimately, the entire area of $61,000 is the most important one that I'd like to see hold in order to avoid further downwards momentum.