Bitcoin Bull Run Won’t Start Before Late 2024
Key Reasons Explained
Despite some positive developments, Bitcoin’s price action remains weak, with BTC trading as low as $64,300. The wider cryptocurrency market has seen a lot of ups and downs recently. June began strong, but by the second week, investor sentiment shifted from optimism to caution. Bitcoin (BTC) has been hovering above $63,000 after facing resistance at the $70,000 mark.
QCP Capital's Report Insights
QCP Capital reports that Bitcoin’s price consolidation is likely to continue for the next two months, with a potential bull run not expected until late 2024. Recent trading shows substantial selling of Bitcoin call options set to expire next month, indicating traders don’t expect significant price movement soon. However, there has been aggressive buying of call options for September through December, suggesting investors anticipate major price movements later in the year.
Historical Financial Volatility
This behavior points to a belief in summer consolidation followed by significant market movements around the US elections, a period historically marked by market volatility.
Miners’ Selling Pressure
Miners are under intense pressure to sell due to high breakeven prices after the recent Bitcoin halving. This selling pressure is expected to continue, delaying any significant price recovery. Miner BTC holdings have dropped to their lowest levels in 14 years, with total reserves decreasing by over 50,000 BTC since the start of the year. Over-the-counter (OTC) selling activity has surged, adding more Bitcoin to the market and suppressing price growth.
German Government’s BTC Sale
The market was unsettled by news of a new large supply of Bitcoin entering the market. Recently, the German government sold 3,000 BTC and plans to offload an additional 47,000 BTC soon. This unexpected influx has added downward pressure on the price. Large amounts of Bitcoin entering the market can create panic, further depressing prices.
ETF Market Sell-Off
There has been continuous sell-off pressure from the exchange-traded funds (ETFs) market. Spot Bitcoin ETFs have seen outflows of more than $500 million over the past week, suggesting a lack of confidence among institutional investors. These investors likely await clearer signs of a price reversal before re-entering the market.
Positive Developments
Despite the bearish sentiment, there have been positive signals. MicroStrategy recently purchased 11,931 BTC valued at approximately $800 million. BitMEX CEO Arthur Hayes suggested that the current Japanese banking crisis could trigger a BTC bull run. Such endorsements and significant investments can boost market confidence.
Current Market Conditions
At press time, Bitcoin is trading at $64,240, showing a 0.79% gain in the last 24 hours and a 3% drop over the past seven days, marking a 7% loss on its monthly chart. While the current conditions point to a delayed Bitcoin bull run, significant bullish movement is anticipated by the end of the year. Analysts predict that the consolidation phase may last until September 2024. Historical data shows that after an initial drop, Bitcoin often enters a consolidation phase lasting up to 150 days, crucial for stabilizing the market and setting the stage for the next bullish breakout.
By understanding these key factors affecting Bitcoin’s price, investors can better navigate the market and make informed decisions.
