Looking at the formation on the daily chart, Bitcoin bulls are struggling to gain momentum. Despite the expansion on August 8, and the reversal of losses on August 5, buyers have not followed through, which means traders are waiting for further confirmation before entering the trade.
The lack of activity over the past few trading days means that prices are inside a bull flag and heading towards a bullish bar on August 8. Despite the bullishness of buyers, the range is expected to be dull, especially given the historical performance after the split.
CryQuant CEO: Bitcoin Will Likely Rise in Q4 2024
Moving on to X, Ki Young Ju, CEO and Founder of CryptoQuant, Notes Prices tend to consolidate as soon as half of the network events occur. This sideways movement tends to continue for most of the year before prices surge in the last quarter as whales step in.
In the last bullish cycle, when Bitcoin halved its network rewards in 2020, prices moved sideways, with prices only rising slightly in last Q4. Comparing the current state of price action to what happened then, Bitcoin is very likely to recover. Joe said that this bullish outlook is due to the fact that “whales will not allow Q4 to be boring with flat performance year-over-year.”
Analysts see the Bitcoin halving as a bullish event, at least considering how prices have evolved. Whenever the network cuts miner rewards in half, the currency becomes deflationary.
Half of the tokens find their way into the circulating supply. Prices will rise if demand remains the same (or increases).
The impact of spot ETFs, mining liquidations, and interest rate cuts
The anticipated supply crunch after the halving on April 20 is why most analysts believe the currency will break all-time highs. This confidence is due to the approval of spot bitcoin exchange-traded funds in January. Since then, major issuers including Fidelity and BlackRock have bought billions of dollars worth of bitcoin.
In addition to institutional demand for Bitcoin, miners have been reducing their liquidations. The hash rate has dropped after weak miners dumped billions of coins in June.However, the hash rate has improved in the past few weeks, indicating renewed confidence on the part of miners who have purchased new equipment to stay competitive despite the low rewards.
In September, the US Federal Reserve is likely to cut interest rates. With inflation falling and the central bank easing its policies, investors may see Bitcoin as a hedge against inflation. This would benefit bulls, who may gain momentum and break all-time highs.
Featured image from Canva, chart from TradingView