This article is also available in Spanish.
According to a cryptocurrency analyst, Bitcoin (BTC) may be heading towards capitulation due to tightening on-chain liquidity. However, this capitulation could be followed by a “full bull” market.
Bitcoin headed lower before rising
In detail string In an X on BTC price analysis, cryptocurrency analyst Cole Garner stated that capitulation could be on the horizon for the leading digital asset. Garner attributes the potential downturn to tightening on-chain liquidity.
Related reading
Tracking global liquidity from central banks around the world, the analyst said he sees a “buy signal” for digital assets. However, more downsides for cryptocurrencies could come before central banks’ liquidity-enhancing measures support them.
In his analysis, Garner stated that “if China doesn’t ring that bell, the Fed or Japan will have to do the job,” likely referring to the recent economic stimulus. injection By China’s central bank in an attempt to boost the country’s bleak economic outlook.
Garner pointed to recent economic stimulus from China’s central bank but noted that the People’s Bank of China (PBoC) this week refrained from injecting additional liquidity, tempering expectations for high-risk assets such as cryptocurrencies.
Garner stressed that the supply of stablecoins is lower compared to the beginning of October 2024.
Analyzing Bitfinex’s “cup,” which essentially represents the total supply of the exchange’s two leading stablecoins — USDT and USDC — Garner noted that their quarterly rate of change is declining, which could lead to a decline in digital asset prices in the short term.
Despite these concerns, Garner noted that Bitcoin posted a higher high on the 8-hour chart, and the market structure remains bullish. Even if Bitcoin price falls to the lows in the $40,000 range, the overall price action is still considered positive.
Garner suggested that if BTC reaches its lower range, traders and investors could consider buying at this price. Even if they are short on cash, they should make sure they do not fear the market and sell their existing holdings in a panic.
Another cryptocurrency analyst, Ali, seems to echo Garner’s view, It helps Bitcoin is stuck in a bearish parallel channel and is at risk of sliding to lows around $52,000. The analyst stressed that BTC must overcome the $66,000 level for a bullish breakout.
Can Bitcoin reach all-time highs in 2024?
With the rest of 2024 to go, Bitcoin bulls expect interest rate cuts by the US Federal Reserve (Fed) to fuel a new rally. However, BTC must overcome many hurdles to maintain its upward momentum.
Related reading
Cryptocurrency analyst Karl Roenfeldt recently male That BTC must overcome the $64,000 resistance level to trigger a rally in Q4 2024. Failure to break this price level could lead to a further decline.
additional, Bitcoin’s price finally turned green in October, giving bulls hopes for another “rise” for the asset, which was… It was characterized by significant price increases. BTC is trading at $60,711 at press time, down 2.4% over the past 24 hours.
Featured image from Unsplash.com, charts from X and TradingView.com
Comments are closed, but trackbacks and pingbacks are open.