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- In August alone, over 20,000 BTC, accounting for roughly 25%, were withdrawn from Gemini.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