As a seasoned crypto investor with a few bear market cycles under my belt, I’ve learned to keep a level head during volatile periods and focus on the longer-term trends. The recent correction in Bitcoin’s price was no exception, with the news of Mt. Gox liquidation and government sell-offs adding fuel to the downward trend.
As a market analyst, I’ve noticed that Bitcoin and the wider cryptocurrency market experienced a correction at the beginning of July. The price of Bitcoin took a significant hit, dipping to a 4-month low of $53,500 on Friday, due in part to the liquidation of Mt. Gox exchange and potential sell-offs from various entities including the US and German governments. Although weekends tend to be more stable for digital assets, there’s a concern that these entities could continue offloading Bitcoin throughout the month, which might lead to further price decreases.
Bitcoin Price Analysis: Large BTC Holders Accumulate Amidst Volatility
Examining the daily Bitcoin price trends reveals a significant decline in value since early June, with the cryptocurrency dipping down to around $72,000. This downturn can be attributed to several factors, including miner capitulation and ETF outflows, which have intensified the bearish sentiment. More recently, heavy liquidation events from notable entities such as Mt. Gox exchange, the German Government, and the US Government have further amplified these price drops.
As a crypto investor, I’ve observed that Bitcoin experienced a significant monthly decline, dropping from around $72,000 to $53,500 – a loss of approximately 25.5%. This downturn also affected the market capitalization, which dipped to a low of roughly $1.06 trillion on a Friday. However, as the weekend drew near, supply pressure lessened, allowing Bitcoin’s price to recover and rebound to around $56,739.
As a researcher studying Bitcoin’s price action, I found it intriguing that a reversal occurred right at the trendline support of a bull flag. Over the last 4 months, this continuation pattern has been instrumental in guiding BTC‘s consolidation between the two downsloping trendlines.
As an analyst, I would interpret this statement as follows: The Bitcoin market won’t experience significant correction until its downward trendline remains unbroken, ensuring that its market capitalization stays above the $1 trillion mark.
In addition, data from Santiment’s latest analysis indicates that those with more than 10,000 Bitcoins in their wallets have experienced substantial gains as a result of the recent six-week market fluctuations for Bitcoin. It is speculated that these major holders, assumed to be mainly exchange liquidity providers, have obtained an extra 212,450 BTC during this timeframe, now controlling approximately 1.05% of the entire Bitcoin inventory.
Over the past six weeks, wallets holding over 10,000 Bitcoins have experienced significant gains due to market volatility. These large addresses are believed to include a substantial number of exchange liquidity providers, accounting for an additional 212,450 BTC and a 1.05% increase in the total Bitcoin supply.
— Santiment (@santimentfeed) July 5, 2024
A significant increase in cryptocurrency hoarding has pushed holdings to their highest point in almost six years, with over 3.19 million Bitcoin wallets holding more than 10,000 coins each. The last occurrence of such a large number of wallets was back in November 2018. This growing trend suggests robust conviction among these major investors, potentially signaling a positive outlook for Bitcoin’s future market behavior.
The ongoing consolidation has moved beyond the 23.6% Fibonacci resistance level, suggesting the overall trend continues to be bullish.
If the flag pattern continues to hold, Bitcoin’s price may surge up to 23% and touch the resistance level near $70000 again. A successful breakout above this resistance is essential for the market to resume its bullish momentum.
The aforementioned upswing will be invalidated if sellers breach the bottom support trendline.
Technical Indicator
- BB Indicator: The BTC price challenging the lower boundary of the BB indicator highlights the sellers are still aggressive towards this asset.
RSI: The Relative strength index below the oversold region (below 30%) after August 23’ could attract fresh buying pressure.
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2024-07-06 18:28