Key Points
- Bitcoin (BTC) price hints at a potential rally to $70K, driven by increasing demand from institutional investors.
- Despite bearish indicators, the decreasing supply of Bitcoin in centralized exchanges suggests a bullish trend.
The price of Bitcoin (BTC) seems to be mirroring the bullish recovery of gold and traditional stock indexes. On Wednesday, August 21, Bitcoin closed trading around $61k, which may suggest a bullish surge. However, both technical and fundamental aspects indicate that Bitcoin is not yet in a clear bullish territory.
Bitcoin’s price has consistently closed below the 50 and 200 Moving Averages (MAs) since the crash on August 5, suggesting that midterm bears are dominating. Moreover, the 50 and 200 daily Moving Averages formed a death-cross for the first time since October last year.
Reversing Bearish Trends
However, the daily Relative Strength Index (RSI) rebounded above the 50 percent level, indicating a potential shift from bearish to bullish trends. On a weekly basis, Bitcoin’s price has been consolidating in an inverted triangular pattern, which typically leads to further bullish continuation.
If Bitcoin’s price continues its bearish trend in August and September as in previous years, it could drop to around $50k before rebounding to a new all-time high. However, if Bitcoin’s price consistently closes above $70k in the near term, this could invalidate the bearish sentiments.
Institutional Investors Increasing Bitcoin Holdings
Market data analysis from Coinglass shows a consistent drop in the supply of Bitcoin in centralized exchanges over the past year. Over the last seven days, a net outflow of 6k Bitcoins was registered across all centralized exchanges.
From March 14, the supply of Bitcoin on centralized exchanges dropped from 2.68 million to about 2.44 million. During the same period, Bitcoin’s price fell from $72k to around $61k. The significant decrease in Bitcoin supply on CEXs can be attributed to the rising demand from spot BTC ETFs in the United States. Over the past two weeks, US spot Bitcoin ETFs have seen a net cash inflow of about $210 million, led by BlackRock’s IBIT and Fidelity’s FBTC.
On Wednesday, the US spot Bitcoin ETF registered a net cash inflow of about $40 million, increasing the total assets under management to around $55.96 billion. On-chain data analysis provided by Glassnode shows that approximately 75 percent of all Bitcoins have not moved in the last six months, indicating a shift from short-term holders to long-term investors.
Midterm Bitcoin Price Expectations
The price of Bitcoin is expected to pave the way for a highly anticipated altseason in the near term. The recent approval of spot Ether ETFs in the United States and Spot Solana ETFs in Brazil have increased the chances of an Altseason in the near term.
BTC dominance has been forming a macro reversal pattern, after a notable uptrend in the past year. Crypto researcher and analyst Benjamin Cowen believes that BTC price action is similar to the prior bull cycles. As a result, Cowen anticipates a strong bullish burst in the fourth quarter and next year.
