bitcoin is currently facing a critical test as it has retraced over 19% from local highs and remains above a key demand level around $54,000 that supports the market structure. This level represents btc’s last line of defense, and if broken, a deeper correction could occur.
Analysts and investors are actively sharing their opinions, with many of them analyzing market data to assess bitcoin’s next move. CryptoQuant CEO Ki Young Ju recently shared crucial data that sheds light on the current situation. His analysis highlights on-chain metrics that provide a clearer understanding of why bitcoin is struggling to hold its value.
Additionally, he has made a prediction on bitcoin’s performance in the final months of the year, highlighting what investors should keep in mind as market conditions evolve. As the year progresses, these insights could help guide market participants as they navigate the volatility surrounding bitcoin’s price action.
US demand is crucial for bitcoin's rise
bitcoin (btc) is currently experiencing significant selling pressure, largely attributed to a noticeable decrease in demand. x.com/ki_young_ju/status/1832333094231404576″ target=”_blank” rel=”noopener nofollow”>shared data Ju’s report reveals that Coinbase’s bitcoin spot trading volume dominance has returned to pre-spot ETF issuance levels. This shift highlights a substantial drop in U.S. demand, a crucial factor in maintaining the bullish momentum seen earlier this year.
Ju highlights that for the bitcoin bull cycle to regain traction, a rebound in US demand is essential. He projects that this recovery could occur in the fourth quarter of 2024, suggesting that we are currently in the middle of the market cycle without having reached the retail bubble phase. This outlook implies that there remains ample opportunity for growth as the market progresses.
The current phase reflects a period of consolidation rather than a terminal decline, indicating that bitcoin’s price dynamics are subject to fluctuations as demand trends change. Investors should be aware that while short-term pressure is evident, there is the potential for a significant rally if demand conditions improve as anticipated. As the market continues to evolve, it will be crucial to keep an eye on these demand metrics to understand bitcoin’s future trajectory.
Technical details of btc
bitcoin is currently trading at $54,404, holding a critical support level that keeps its price within a reasonable accumulation pattern. This level is crucial to avoid further declines. If btc fails to hold this support, a deeper correction could be on the horizon.
Currently, btc is trading below the 4-hour 200-day moving average (MA) which sits at $59,263. Reclaiming and holding this level as support is essential to turn the market sentiment around and reignite the bullish momentum. A decisive break above $60,000 would likely trigger renewed demand and could propel the price higher.
Conversely, if bitcoin loses its current support and falls below $54,404, it could signal a move towards lower demand zones, with $49,000 emerging as a key target for further testing. This scenario would signal a bearish shift in the market, which would require close monitoring of price movements to assess future trends. The ability to sustain above the $54,404 level and reclaim the 200 MA will be critical in determining btc’s near-term outlook and recovery potential.
Featured image of Dall-E, chart from TradingView
