Key Insights

• Bitcoin price prediction kicks off the first 5 days of July on an uptrend but it could be another smoke screen.
• CryptoQuant analyst says the market is struggling with low liquidity, suggesting that it could be difficult for the markets to sustain an uptrend.
• Rising exchange whale ratio signals higher whale flows onto exchanges.

Bitcoin price predictions are bound to pop up now that the market is showing signs of recovery. But before you get excited and buy more, it might be wise to look at what smart money is doing.

First, plenty of Bitcoin price predictions have been offered up so far. Most of them do eventually come to pass, given large enough time frames.

BTC crypto price held on to an 8% plus gain since the start of July, and has maintained its price above $60,000 so far. However, Bitcoin price predictions, especially on short-term timeframes, have to be backed by actual data.

Bitcoin price bullish momentum seems to have cooled down after retesting the 50% RSI level. It had already retreated by over 2% at press time, confirming weak bullish momentum above $62,000.

This is important because a push above the 50% level means price will likely maintain an upside, and the opposite means another potential reversal.

Low Liquidity Reveals Why Short-Term Bitcoin Price Predictions Could Favor The Downside

The RSI pivot at its mid-point was not the only reason behind the bearish short term Bitcoin price prediction. CryptoQuant analyst Darkfost noted that the market had been struggling to secure liquidity.

Darkfost’s analysis noted that USDT and USDC, two of the largest stablecoins by market caps shrunk considerably in June. He noted that this decline was caused by more liquidity exiting crypto than the amount of liquidity that flowed back in.

This is contrary to analysts’ expectations during periods when the market is building up for a major bullish comeback. Stablecoin growth accelerates just before a major rally but that does not appear to be the case this time.

This suggests that the BTC price may not have sufficient short-term momentum to drive a robust recovery.  Moreover, on-chain data revealed weak spot inflows during the latest recovery and elevated positioning on the derivatives market.

Weak spot flows usually support a limited rally. This aligns with the recent BTC price action.

Whale Exchange inflows signal weak demand

Whale activity is often an ideal measure for determining the level of supply or demand. This is because whales tend to move the market due to their capacity to move more liquidity.

Interestingly, the Bitcoin exchange whale ratio for all exchanges has been ticking higher. It jumped from 0.49 at the end of June to 0.63 at the time of writing.

A high whale ratio signals that a disproportionate share of inflows was driven by whales. In other words, whales have been taking profits during the latest short-term recovery.

Whale profit-taking is bound to suppress the bulls and potentially trigger another surge in sell pressure.

In summary, the above data points to a limited rally and may also indicate that the market might wipe out the recent gains. However, this is subject to the absence of a major catalyst capable of shifting investor sentiment.

Recent data revealed that the US government, through the Federal Reserve, might be looking to inject liquidity into the market. Some of that liquidity could enter the crypto market, helping shield it from further downside.