Key Points
- Bitcoin’s Long-term Holder SOPR hit 1, indicating traders sold at break-even, reflecting market caution.
- Despite recent price drops, analysis suggests a potential Bitcoin rally, possibly in Q4 2024.
Bitcoin’s recent market activity and on-chain metrics provide valuable insight into the market sentiment, considering its status as the largest cryptocurrency.
The Long-term Holder SOPR, a metric tracking Bitcoin transactions by holders of more than 155 days, is a significant indicator. A SOPR value over 1 signifies profits, while a value under 1 indicates losses.
Following the latest Bitcoin price drop, the SOPR reached 1. This means many traders sold at break-even, indicating a cautious market.
Bitcoin’s Current Market Position
Previously peaking at $62k, Bitcoin is now trading below this level due to substantial liquidations around that price point.
Bitcoin’s price action in the BTC/USDT pair is currently moving within a broadening wedge pattern, typically a sign of market consolidation before a potential move.
This pattern is at a critical support level, with accumulation ongoing as traders remain uncertain about Bitcoin’s potential for an upward trend.
There is a possibility for Bitcoin to drop to the $53k price level before a potential upturn, likely in Q4 2024. The price hovering around $59k adds to the uncertainty during this crucial period.
Bitcoin’s Potential Future
Further analysis of funding rates from Coinglass showed little change over the past month, despite a significant market flush on August 5 caused by Japan’s stock market crash due to rate hikes.
Since then, while funding rates have stabilized, they’ve remained relatively low. This suggests that Bitcoin is in an accumulation phase.
Moreover, Bitcoin’s Relative Strength Index (RSI) recently recorded its second significant breakout during this bull cycle, potentially setting the stage for another rally.
If Bitcoin dips further below the $53k level, it might trigger panic selling, possibly leading to a rebound.
The RSI breakout, similar to a previous one that led to a significant bullish rally, suggests that Bitcoin might be preparing for another upward surge.
Historically, the last quarter of the year following a Bitcoin halving has been bullish. This trend might continue in 2024.
Despite a stagnant summer market, Bitcoin investors and traders should remain patient, as the market has a history of rewarding those who hold on during such periods.
This could be an ideal time to accumulate more Bitcoin, anticipating a potential rally in the final quarter of the year.
