As a seasoned researcher with over two decades of experience in financial markets, I have seen bull cycles rise and fall, and Bitcoin is no exception. Having closely followed the crypto space since its inception, I can confidently say that the current market dynamics bear a striking resemblance to the 2020 bull cycle following the halving event.
Examining the day-by-day structure, the Bitcoin bulls seem to be having difficulty gaining traction. Although there was growth on August 8, this helped counterbalance the losses from August 5, yet the buyers failed to continue their push, suggesting that traders are hesitant and preferring more assurance before jumping in.
In simpler terms, because trading volume has been low recently, we’re seeing prices move in a pattern known as a “bull flag” within the context of an overall bullish trend that started on August 8. Despite buyers’ optimism, this quiet price range is expected given historical data following the halving event.
CryQuant CEO: Bitcoin Will Likely Rally In Q4 2024
Discussing with Ki Young Ju, the head honcho and brainchild of CryptoQuant, he points out that price fluctuations often stabilize when there’s a network split event. This period of stability typically persists for much of the year before prices surge significantly during the final quarter, as whales become more active in the market.
During the previous bull market, when Bitcoin reduced its network rewards in 2020, the prices remained relatively stable for most of the year, only showing minor increases in the final quarter. Given that the current price trend resembles this pattern, it’s quite probable that Bitcoin will bounce back, according to analyst Ju, who believes this bullish perspective is due to “whales ensuring that Q4 doesn’t turn out dull with a flat year-over-year performance.”
Experts often view the Bitcoin Halving as a positive development, given its impact on price trends in the past. Essentially, when the mining rewards are reduced within the network, Bitcoin transitions into a deflationary currency.
As a researcher studying this particular subject, I find that about half of the total amount of tokens end up in circulation. If the demand for these tokens stays constant or even increases, we can expect prices to gradually climb higher.
Impact of Spot ETFs, Miner Liquidation, And Interest Rates Cut
The predicted shortage in supply after the Halving on April 20th is what makes many analysts optimistic that the coin will surpass its previous record highs. This optimism stems from the approval of spot Bitcoin ETFs in January, which has since led major issuers like Fidelity and BlackRock to purchase billions of dollars’ worth of BTC.
Apart from the institutional interest in Bitcoin (BTC), miners have reduced their sell-offs, possibly due to a decrease in liquidation. The hash rate dipped following massive coin sales by less efficient miners in June. However, in recent weeks, there’s been an improvement in the hash rate, suggesting that miners, having bought new equipment to maintain competitiveness despite lower rewards, are regaining confidence.
By September, it’s expected that the U.S. Federal Reserve will probably lower interest rates. With decreasing inflation and the central bank loosening its grip, investors may view Bitcoin as a protective asset against inflation. This could work in favor of bullish investors, who might gain traction and potentially surpass previous record highs.
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2024-08-22 11:11