Key Points
- Bitcoin’s price has been in a consolidation phase for almost two weeks, with a slight decline in the global crypto market cap.
- Despite some large Bitcoin holders exiting their positions, positive signs indicate mainstream acceptance and potential upside for Bitcoin.
Bitcoin’s price has been consistent for nearly two weeks, resulting in a slight 2.2% drop in the global crypto market cap, which now stands at $2.06 trillion.
Trading at $58,000, Bitcoin (BTC) has been part of this ongoing consolidation phase.
Stagnation in the Market
The lack of significant price movement coincides with stagnation in both the spot and futures markets. Bitcoin’s open interest saw a slight increase to $30 billion on Monday, but it is still lower than the month’s peak of $36 billion.
Spot market volume for Bitcoin fell to $17 billion on Monday, a significant decrease from the August 6 high of over $120 billion. This is typical when Bitcoin and other cryptocurrencies are not in an uptrend.
The volume in Ethereum (ETH), Solana (SOL), and Base Decentralized Exchange platforms has also seen a drop of over 20% in the last week.
There are indications that some large Bitcoin holders are exiting their positions. Ceffu, a company that offers custody and liquidity solutions to institutions, has moved coins worth $211 million to Binance since July 31.
Positive Indicators for Bitcoin
Despite these factors, there are positive signs for Bitcoin. The cryptocurrency has remained stable even amid the ongoing Mt. Gox movements. Data indicates that Bitcoin held in Mt. Gox wallets decreased from 141,686 coins on January 1 to 46,164, suggesting that the market has absorbed these sales without a significant drop.
Another positive sign is the increasing number of large institutions holding spot Bitcoin ETFs, indicating that the asset is gaining mainstream acceptance. Companies like Goldman Sachs, HSBC, and Barclays are noteworthy mentions.
Long-term charts suggest that Bitcoin is holding up well. On the weekly chart, Bitcoin has consistently stayed above the 100-week Exponential Moving Average since October last year.
Bitcoin has also formed a falling broadening wedge chart pattern, often leading to a bullish breakout. This pattern, characterized by connecting the lower lows and lower highs, typically sees a significant breakout when the price moves above the lower side of the wedge.
Moreover, Bitcoin has formed a cup and handle pattern, with the upper boundary at $68,830. The wedge pattern is part of this handle, and the accumulation and distribution indicator has reached its highest level in years.
The monthly chart also indicates potential upside for Bitcoin. Similar to the weekly chart, it shows a cup and handle pattern, with the accumulation and distribution indicator near its all-time high. Bitcoin has remained above the 50-month moving average.
Bitcoin is also forming a hammer candlestick pattern, characterized by a long lower shadow, a small body, and little to no upper shadow. For this pattern to fully form, Bitcoin needs to close the month slightly below $64,000. If this happens, it could signal further upside.
In the long run, a Bitcoin rally will be confirmed if it breaks above the year-to-date high of $73,902.
