Bitcoin is facing difficulties in reclaiming the $30,000 level, leading analysts to predict that a period of choppy accumulation may persist for several months. In July, Bitcoin surged to a new yearly high of over $31,800 driven by optimism surrounding the potential approval of exchange-traded funds (ETFs) in the United States and Ripple’s legal victory against the U.S. Securities and Exchange Commission. However, the price closed below $30,000 as buyers struggled to push it back above this crucial support level.
Although Bitcoin’s short-term price shows weakness, data suggests that the worst days of the bear market are likely behind us. Glassnode’s latest report indicates that short-term holders are becoming more likely to spend and take profits, with 88% of their supply in profit. This spike in profit came after Bitcoin’s price increase following BlackRock’s ETF filing. However, long-term investors have refrained from selling, reflecting a sustained profit regime similar to previous bullish phases.
While selling pressure from long-term investors remains minimal and Bitcoin has witnessed positive accumulation on-chain, the profit levels of short-term holders suggest the risk of further correction. Despite this, many investors and analysts still anticipate a positive impact on price from the upcoming Bitcoin block reward halving. PlanB’s stock-to-flow (S2F) model, which analyzes how Bitcoin’s halving affects its price, shows that Bitcoin’s S2F value reached parity with gold in 2020. However, Bitcoin’s price still has a long way to catch up to gold’s due to the generations of trust built around gold.
Bitcoin’s S2F model indicates that the price will likely surge after the next halving in April 2024. However, it takes time for the changed stock-to-flow reality of each halving to be fully reflected in Bitcoin’s price. Technically, the BTC/USD pair turned long-term bullish with its breakout above the 200-day moving average in January 2023. The recent bullish cross between the 20- and 50-period weekly moving averages further confirms a long-term positive trend.
However, a parabolic bull run is not expected in the near future based on historical data. Instead, the market is likely to witness sideways consolidation in a parallel range leading up to the next halving event. It is important to note that this article does not provide investment advice, and readers should conduct their own research before making any decisions.
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