The bitcoin price is weak at spot rates and is expected to contract starting in July 2024, when it will reach a high below $66,000. While the bears continue to push and aim for the round figure of $60,000, the bulls are optimistic and expect a rally in the coming sessions.
Technically, the zone between $66,000 and $70,000 is a crucial area that buyers need to decisively break for the uptrend to develop. Any rally above $72,000 would be ideal as it is the last resistance before an all-time high of around $74,000.
bitcoin in trouble: Will bulls absorb rising exchange inflows?
While bitcoin could find strength, one analyst believes the coin will continue to record lower and lower lows, confirming the losses seen for most of this week. In a post citing CryptoQuant dataThe analyst highlighted how age groups have evolved in recent years and months.
Analysts use age bands to categorize coins based on the last time they moved on-chain. Some moved in the last week, others in the last quarter, and others in years. The analyst noted that an analysis of these bands points to increasing selling pressure.
Notably, the analyst noted that large volumes of long-term holders (LTH) continue to be transferred to major exchanges such as Coinbase and Binance. Typically, when coins are transferred to exchanges, it means that the entity transferring them is interested in selling, a bearish signal.
If more whales or addresses holding large batches of btc move coins to exchanges, it could be a major signal that prices will collapse.
The analyst noted that the increase in coins transferred by LTHs to major exchanges coincided with price declines, as seen from late July 2024. Although the market has matured, the analyst warns that the influx of new coins will likely delay price recovery.
Will btc shake off its weakness? Capital inflows into spot ETFs are crucial
Looking at the daily chart, it remains to be seen whether the bulls will step in today and take advantage of the onslaught of selling pressure we have seen this week. Immediate support lies around the $60,000 and $63,000 area. A recovery above this zone could see bitcoin rally slightly, shedding this week’s weakness.
Still, historically, the speed with which prices recover or fall depends on capital inflows, mostly from newcomers. However, this has been altered with the introduction of spot bitcoin ETFs in the United States.
One analyst, citing recent events, points The analyst notes that the recent high, which took the coin to over $72,000, was not supported by an increase in inflows from new investors. Instead, as the analyst assesses, btc prices are heavily influenced by inflows from spot ETFs, i.e. mainly from institutions.
As prices fall, sentiment could be affected, leading to capital outflows. If more capital is withdrawn from spot ETFs, the btc sell-off would be more severe. On August 1, all ten of the U.S.-based bitcoin spot ETFs saw x.com/lookonchain/status/1819041416502513932″ target=”_blank” rel=”noopener nofollow”>money outflows of 1,500 btc, or more than $94 million, data from Lookonchain shows.
Featured image from Canva, chart from TradingView
