Bitcoin Price Rebounds towards $60K Fueled by Increased Whale Activity, Is Correction Over?

As a researcher with experience in the cryptocurrency market, I’ve witnessed the volatility and unpredictability that comes with it. The recent surge in Bitcoin’s price above $59K was a welcome relief for investors after a prolonged period of uncertainty. However, the lack of momentum to sustainably break through the 200-day moving average is concerning.

The price of Bitcoin (BTC) rose by more than 2% within the last 24 hours and temporarily reached a peak above $59,000 during early trading hours in Europe on Wednesday. Despite this increase, Bitcoin had difficulty surpassing its 200-day Moving Average (MA), which it has consistently failed to close above in recent days.

As a crypto investor, I can’t help but feel apprehensive about the potential for further downturn in the market. The Fear and Greed Index for Bitcoin stood at 28% just a few days ago, which is significantly lower than the 44% we saw last week.

The price of Bitcoin has indicated a bearish outlook for the medium term following its recent dip below the $61,000 mark last week. This development reinforces the possibility of a double top formation, as suggested by a bearish divergence on the weekly Relative Strength Index (RSI).

If Bitcoin’s price fails to recover and hold above the $61,000 support in the upcoming period, then a continued drop toward $48,000 is likely.

Bitcoin Whales Grabs the Opportunity

In the past few weeks, there has been increased on-chain activity on the Bitcoin network following a notable resistance point around $73,000. This heightened activity can be attributed to large Bitcoin traders, or “whales,” including one major player who recently acquired 10,000 Bitcoins during the recent market downturn.

Yesterday, as Bitcoin plunged to $54,000, I saw an opportunity and decided to purchase approximately 10,000 Bitcoins for a total investment of roughly $540 million.

— Ali (@ali_charts) July 9, 2024

According to Coinspeaker’s report, institutional investors have poured over $600 million into US-listed Bitcoin exchange-traded funds (ETFs) in the past three days, with BlackRock’s IBIT leading the charge. Despite the unpredictable price fluctuations of Bitcoin, these investors continue to amass the cryptocurrency.

Over the past three weeks, the German government has been actively selling off its Bitcoin stash. Based on information from Arkham Intelligence’s on-chain analysis, the German government now owns around 23,960 Bitcoins, which is equivalent to roughly $1.4 billion in value.

During this period, approximately three months more, Mt. Gox will continue with its repayments. Subsequently, FTX, which has ceased operation, is projected to distribute roughly $16 billion to its creditors.

Economic Outlook

The relationship between the crypto market and the stock market has grown more interconnected in the crypto industry, with institutional investors spearheading the mainstream adoption of web3 technology. Nevertheless, there’s optimistic expectation within the crypto sector for a significant price surge if the U.S. Federal Reserve decides to reduce interest rates later in 2023. The upcoming US Consumer Price Index (CPI) report on Thursday and Producer Price Index (PPI) data on Friday will offer valuable insights into the economic landscape.

Despite this, the approaching US presidential elections are being characterized as a significant catalyst for the crypto market as a whole. The crypto debate has already gained prominence in the election discourse from politicians across the political spectrum.

Long-term Picture

The price of Bitcoin is currently experiencing a prolonged upward trend similar to the bull market seen in 2017, which peaked in early 2018. Although there’s a possibility that Bitcoin’s value might dip down to around $48,000 in the near future, many experts predict that it will finish this year with a closing price of at least $100,000.

As a financial analyst, I can tell you that the anticipated launch of spot Ethereum Exchange-Traded Funds (ETFs) in the US markets is expected to bring about additional inflows of cash into cryptocurrency investment vehicles.

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2024-07-10 12:41