Bitcoin at $66K as US-Iran deal revives risk appetite

Market overview

The crypto market capitalisation has risen by 1.8% over the past 24 hours to $2.24 trillion, spurred by the preliminary agreement between the US and Iran to end the conflict. Risk appetite has surged, pushing the crypto market towards the upper boundary of the upward channel it has been trading within since 6 June. Technically, cryptocurrencies found support on touching the 200-week moving average, indicating that the long-term positive outlook remains intact. On the other hand, the short-term view suggests that a recovery up to $2.30T could be interpreted as a corrective bounce following the downward momentum from May’s highs. 

Bitcoin is trading near $66K, up 2.4% over the past 24 hours. This recovery towards the February-April lows could serve as a good test for the bulls. If the recovery stalls near current levels, there will be reason to suggest the rebound is nearing its end and that further declines are possible. If, however, the previous support level does not turn into resistance, bullish sentiment will rise significantly in the coming days. 

News background

According to SoSoValue, net weekly outflows from spot BTC ETFs fell to $316 million from a record high the previous week. On Friday, the first inflow was recorded after nearly a month of outflows.

Investors are losing interest in Bitcoin and gold as hedges against the depreciation of fiat currencies, JPMorgan notes.

Bitcoin is showing signs of a late-stage correction: most recent buyers are now sitting on losses; demand remains weak and does not match the levels typically associated with the formation of a long-term bottom, according to Glassnode.

According to Galaxy Research, only four out of 13 key indicators currently point to a bottom in the Bitcoin market cycle. The firm expects BTC to potentially fall to the $40K–$46K range.

The leading cryptocurrency is trading at a mining cost of $61.2K. Of this amount, electricity costs account for around $49K, and a long-term bottom may form near this level, Capriole Investments suggests.

Bitcoin has already formed the bottom of the current cycle at just above $59K, according to Standard Chartered. The market is beginning to lay the groundwork for a new phase of growth, and current levels look attractive to long-term investors.

As a result of the latest adjustment, Bitcoin’s mining difficulty plummeted by 10.09% to 124.93 T. This is the largest decline in the metric since early February, when the collapse at that time was influenced by a winter storm in the US. 

Summary: The crypto market has rallied amid rising risk appetite, but weak demand and signs of a correction suggest a further decline in Bitcoin remains a risk.