BTC Price Consolidation and the Next Breakout

BTC Price Consolidates As the Next Breakout Brews

The price of Bitcoin (BTC) has settled around $26,000, indicating a period of consolidation. Bulls have established support at $25,000 in an effort to prevent a further decline to $20,000 before the next bull run.

Bollinger bands, a volatility indicator, suggest a short-term breakout is imminent based on the current BTC price outlook.
A breakout occurs when the price moves beyond one of the bands, signaling a change in trend.
The price tends to return to the moving average, meaning a rebound to at least $26,600 is possible if support at $26,000 holds.
Obstacles on the recovery path include the 50-day Exponential Moving Average (EMA) at $26,323, the 100-day EMA at $26,983, and the 200-day EMA at $27,829.
Declines below $26,000 could lead to a massive sell-off, with BTC potentially falling to $20,000.

Bitcoin Supply On Centralized Exchanges Dims

While BTC price consolidation may suggest a lack of investor interest, data shows that reserves on US-based exchanges have declined significantly. Long-term buyers prefer to store their digital assets away from centralized exchanges, reducing potential selling pressure.

Data by CryptoQuant reveals that reserves on US-based exchanges have declined by at least 30% and up to 50% or more.
Institutional activity in the crypto market is on the rise, with institutions continuously buying Bitcoin.
Increasing supply on centralized exchanges often leads to sell-offs as investors close positions to book profits.

Institutions’ Accumulation

Data from CryptoQuant shows that institutions have been actively accumulating Bitcoin.

In August alone, over 20,000 BTC, accounting for roughly 25%, were withdrawn from Gemini.

The Next Halving and Future Bull Run

Despite the current selling pressure, investors are looking ahead to the next halving around April 2024. BTC’s four-year cycles in line with halving events suggest a potential bull run in 2024/2025 that could propel the price to a new all-time high.

Hot Take: BTC price consolidation around $26,000 indicates a potential short-term breakout. Decreasing supply on centralized exchanges and increasing institutional accumulation bode well for the future of Bitcoin. Investors remain optimistic about the next halving and the possibility of a future bull run.