3 reasons why Bitcoin analysts believe BTC price recovery is overdue

June 14, 2024 Coin Telegraph

Bitcoin price is ‘stuck’ at $30K — Here are 3 reasons why

July 18, 2023 Coin Telegraph

Bitcoin

Bitcoin bulls face a cocktail of short-term holder and miner selling, along with a severe lack of volatility.

Bitcoin (BTC) has spent almost a month at or near $30,000, but this is no coincidence, new analysis claims.

In one of its Quicktake market updates on July 17, on-chain analytics platform CryptoQuant highlighted three key factors keeping BTC price action in the same place.

Bitcoin speculators in the driving seat

Bitcoin has rebuffed any attempt at a breakout for weeks on end, making casual one-year highs but always falling lower afterward.

For CryptoQuant contributor Axel Adler, this has roots — among other things — in speculative trading.

Short-term holders (STHs), he notes, have divested themselves of their holdings since April, leading to increased selling pressure above $30,000.

“This group is actively selling off their Bitcoin reserves, exerting significant pressure on the market,” he wrote.

“This indicates that short-term investors are actively liquidating their assets, thereby locking in their profits.”

CryptoQuant defines STHs as entities hodling coins for six months or less.

*Bitcoin STH supply annotated chart. Source: CryptoQuant*

Other recent data from on-chain analytics firm Glassnode led analysts to the conclusion that the STH cost basis — recently around $26,400 — is likewise keeping BTC price action afloat in times of more pronounced downside pressure.

Miner selling preempts Bitcoin halving

Bitcoin miners are also on the radar this quarter as higher BTC prices spark an uptick in sales.

For Adler, selling BTC holdings to cover expenses ahead of the block subsidy halving in 2024 marks another factor influencing price performance today.

“Miners are actively selling their Bitcoin reserves,” he summarized.

“This is not a random occurrence; we have seen peak sales over the last year. This is connected to the upcoming halving event when the reward for mining Bitcoin decreases by half. Miners require liquidity to invest in new equipment to stay competitive.”

*Bitcoin miner exchange inflow realized price annotated chart. Source: CryptoQuant*

As Cointelegraph reported, mining pool Poolin recently contributed extensive exchange inflows, sending large tranches of BTC to Binance. This has since become a topic of speculation amid rumors over the pool’s financial buoyancy.

Real BTC price volatility absent

Bitcoin volatility remains among its lowest in terms of historical context.

CryptoQuant reveals a net slowdown in trading activity since April, as those taking profit hope for a more substantial breakout to come.

Data from TradingView shows the Bitcoin historical volatility index at 14.77 as of July 18 — far below even its 2023 peak.

*Bitcoin historical volatility index chart. Source: TradingView*

“All these factors together form the current picture of the Bitcoin market, where the price appears to be ‘stuck’ in a narrow range,” Adler concluded.

“However, as always with cryptocurrencies, changes can occur very quickly, so investors and traders should closely monitor on-chain metrics to stay informed about market changes.”

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Why is Bitcoin price stuck?

May 22, 2023 Coin Telegraph

Analysis

Bitcoin is a volatile asset but BTC price can get stuck inside narrow trading ranges for week, if not months for multiple reasons.

Bitcoin (BTC) continues with its sideways BTC price action under $27,000 on May 22 as the bulls and bears find it hard to break the stalemate.

Which way Bitcoin?

Notably, BTC price has fluctuated inside a narrowing ascending triangle range since May 11, defined by a horizontal resistance around $27,500 and a rising trendline support currently near $26,890.

*BTC/USD four-hour price chart. Source: TradingView*

On May 22, Bitcoin dropped below the support trendline to around $26,550 but recovered quickly afterward to $26,900 — a bullish rejection. Meanwhile, the volumes were relatively lower, suggesting fewer traders participated in the intraday dump-and-pump move.

Overall, these technicals illustrate an ongoing bias conflict among traders. In other words, they are unsure about the direction of Bitcoin's next price trend with the same amount of buyers and sellers — something that derivatives are also hinting at.

Why is BTC price not moving?

Flat price action in the Bitcoin market can precede periods of extreme price volatility, triggered by big events.

For instance, Bitcoin fluctuated in the $16,000-17,500 range between Nov. 9, 2022, and Jan. 10. 2023, right in the aftermath of the FTX crypto exchange's collapse. The price attempted to break above and below the range on some days but failed to establish a recovery trend.

The market witnessed a similar flat trend after the sharp BTC price decline led by the collapse of Terra in May 2022. Notably, BTC/USD traded inside the $28,000-30,000 range for almost a month before entering a decisive breakdown stage.

*BTC/USD daily price chart. Source: TradingView*

Bitcoin's flat trajectory in May 2023 has followed the U.S. banking crisis rally two months ago with numerous failed attempts to cross above $30,000, a psychological resistance level.

In other words, Bitcoin traders are waiting for a potential market trigger once again that could decisively push BTC price in either direction.

One major potential event will be the Federal Reserve's decision on interest rates next month.

Currently, the conflicting outlook on raising interest rates is likely the main factor behind the sideways action of the stocks, including risk assets and cryptocurrencies. In fact, BTC price has seen one of its least-volatile periods since April, historic volatility data shows.

*Bitcoin 30-day price volatility after influential events. Source: BuyBitcoinWorldwide.com*

What's next for BTC price in the short term?

Technicals meanwhile show that a potential breakout above its 50-day exponential moving average (50-day EMA; the red wave) around $27,580 is in play.

If this happens, BTC price may once again retest the important $30,000-resistance level, where a rejection will be highly-probable upon first attempt.

Conversely, a pullback from the 50-day EMA would put BTC price en route toward the next big support level for a potential bounce at its 200-day EMA (the blue wave) near $25,000.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Why is Bitcoin price stuck