Bitcoin holds $58,500 as strategist Gareth Soloway calls a potential bottom

Bitcoin closed at $58,500, its lowest point of the quarter, but chief market strategist Gareth Soloway argues the selloff may have exhausted itself.

Bitcoin fell to $58,500 at the quarterly close, its lowest level in three months, as macro headwinds and ETF outflows pushed the market into oversold territory.

"Since the break below $70,000, exchange inflows have risen sharply, with the majority of this volume consisting of coins held for roughly six to twelve months, coins most likely accumulated near the cycle highs," CryptoQuant contributor Crypto Sunmoon wrote in a Quicktake blog post.

BTC traded at $58,549 as of 09:30 UTC on July 1, down roughly 20 percent in Q2, according to CoinGecko. The Relative Strength Index sits at 34 on the daily chart, just above the oversold threshold of 30, while the Average Directional Index reads 36.9 — confirming a strong downtrend is in place, per TradingView data. Spot Bitcoin ETFs bled roughly $4 billion in June, stripping away the institutional bid that had cushioned earlier drawdowns.

The $58,035 level has held as support through multiple tests, but a break below that opens the path to $55,528 — a scenario prediction markets on Myriad price at 80 percent probability. For bulls, reclaiming the Fibonacci Golden Zone between $62,644 and $63,732 is the first step toward any trend reversal.

The macro backdrop has been the primary driver of Bitcoin's decline. The US dollar surged to a 40-year high against the Japanese yen, reaching 162.50, increasing the odds of government intervention that could further pressure risk assets. Federal Reserve Chair Kevin Warsh is scheduled to speak at the ECB forum in Portugal, and markets are pricing an 80 percent chance of a December rate hike, according to CME FedWatch data.

On-chain data from CryptoQuant shows exchange inflows rising sharply since BTC broke below $70,000, with the majority of volume consisting of coins held for six to twelve months — positions most likely accumulated near the cycle highs. "This pattern is consistent with capitulation among cycle-top buyers, as holders appear to be cutting losses rather than continuing to hold through the drawdown," Crypto Sunmoon added.

The options market tells a more nuanced story. Quarterly expiry on June 26 saw 151,000 BTC options with a notional value of $9.3 billion settle, with a put/call ratio of 0.63. Despite bearish positioning in the spot market, traders are buying $65,000 call options for the July 3 expiry, indicating expectations of a recovery in the coming days, according to GreeksLive data.

Chief market strategist Gareth Soloway at Verified Investing offers a contrarian read: the capitulation among late-cycle buyers, visible in on-chain exchange inflow data, has historically coincided with long-term bottom formation in both the 2018 and 2022 cycles.

This article is for informational purposes only and does not constitute investment advice.