- Bitcoin costs hit year-over-year lows for the third week in a row as market volume increased
- A repeat of BTC and SPX’s 2019 divergence could spark bullish sentiments
Bitcoin [BTC] According to IntoTheBlock’s, fees have hit a yearly low for the third week in a row, following the recent stabilization of the market. observation on X.
Following this drop in Bitcoin trading costs, NPS, the third largest public pension fund in the world, invested $34 million in MicroStrategy stock for Bitcoin exposure.
This move highlights a growing trend among institutions to diversify into Bitcoin through companies with significant Bitcoin holdings in this age of low fees. This is also a sign that the mainstream is increasingly accepting this asset class as viable.
The divergence between BTC and SPX 2019 repeats itself
The difference between Bitcoin and the SPX signaled a reversal, similar to 2019, when the price of Bitcoin rose after a Fed rate cut. This pattern will repeat itself in 2024, with the Fed expected to cut rates again.
Bitcoin’s recent decline and subsequent divergence from the SPX mirrors the 2019 trend, which led to a significant price increase. Despite the skepticism, this scenario would follow a known cycle, reflecting a recurring market pattern.
Source: TradingView
The influence of Stablecoins reserves on the BTC price
Stablecoin reserves on exchanges are currently at an all-time high, significantly increasing Bitcoin’s purchasing power.
This wave causes large institutions to accumulate quickly Bitcoinas can be seen from the widening wedge pattern on the 4-hour BTC/USDT chart.
Source: CryptoQuant
In the first quarter of 2024, 874 institutions held Bitcoin ETFs, and by the second quarter this number had increased to 1,008.
In fact, a quarter of Bitcoin’s total supply was purchased for $58,000-73,000, which amounts to approximately $300 billion. Investors who bought within this range are likely holding on to future gains, indicating they expect Bitcoin’s price to rise further.
However, despite Bitcoin’s sluggish price action and low retail interest, institutional buying is accelerating – another sign of the crypto’s long-term growth.
Combined with recent developments in Bitcoins a positive long-term price development can be observed on the market.
Source: CryptoQuant
The market volume is increasing despite the low financing rates
Since the peak in March, market volumes have also been declining for an extended consolidation phase.
Just last week, despite the global market turmoil caused by the Japanese stock market crash, the crypto markets saw a significant increase in volume on the charts.
Source: Daan Crypto Trades on X
This has led to increased volatility in Bitcoin and other cryptocurrencies.
Finally, Bitcoin Funding rates on Binance have also reached their lowest point of the year. The more shorts are loaded, the higher BTC will go.
Source: CryptoQuant
Now that Binance holds the largest share of Open Interest, there may also be bearish sentiment in the short term. However, tThis would provide a potential buying opportunity for long-term investors and traders to accumulate more Bitcoin.