Blame the “Supermoon” If Bitcoin Crashes or Soars to $35,000 in July

If historical bitcoin price performance pans out, one trader is adamant that the coin is at a turning point at spot rates. Based on the astronomical patterns and the arrangement of the Moon, the trading desk QCP Capital believes that Bitcoin price could witness a bullish run towards the $33,000 to $35,000 levels before reversing after the sharp losses in 2022. Conversely, after a 20% rally in the price of bitcoin since mid-June 2023, there could be a contraction that could be seen. The coin has declined after impressive performance in the last few trading weeks.

Supermoon Coincides With Major Bitcoin Price Reversal

Based on technical and fundamental action, the trading desk cited bitcoin’s past performance at various cyclical phases. For example, when bitcoin fell in early 2020, mainly due to fears of far-reaching consequences of the lockdown brought about by the COVID-19 pandemic, it registered a rally of 161% from early March to May 2020.

This is what was seen from mid-June to August 2022 when the bitcoin price surged 43% in the depths of the previous cyclical bear market. Marking the peak, bitcoin underwent a correction from late April to June 2021, mainly down 51% in a bullish market.

According to The Trading Desk, the “supermoon” saw a major reversal between bearish and bullish times. In astrology, a supermoon is a full moon that occurs when the moon is at its closest point to Earth in its elliptical orbit. During this the moon appears brighter than usual and this happens only once or twice a year. A supermoon occurred on July 4 and traders believe that bitcoin is at a critical reaction point.

Over the years, there has been a perception that supermoons are associated with bullish markets. However, no scientific findings support this, nor is there any statistical correlation. Nevertheless, based on trader analysis, several correlations and timing of bitcoin price peaks and bottoms during the supermoon can be used to predict BTC markets.

Will prices rise or fall?

While it remains to be seen whether BTC will break above $31,300 and rally towards the $35,000 region, the trading desk says that fundamentals will play a key role and expects BTC to rally within the $33,000 to $35,000 liquidation zone.

Overall, monitoring of how the United States Federal Reserve will implement its monetary policies will be necessary in the future. Although inflation is falling, traders believe it has not fallen low enough to warrant a rate cut. A rate cut shifts capital to store-of-value assets, which is likely to benefit bitcoin.

On the more pessimistic side, the trading desk cautioned that BTC has strong resistance at the spot level as the recent rise is likely to be the fifth and final wave from the November 2022 low. Additionally, the $33,000 to $35,000 resistance area is an important resistance trend line.

Because of this, any downside could see BTC retest the $24,000 and $26,000 support areas.

Feature image from Canva, chart from TradingView