- Bitcoin saw a resurgence in demand after retesting a major ascending support line.
- The short-to-medium-term outlook was still bleak, but the upcoming halving could boost long-term performance.
About a month ago, we examined the likelihood that Bitcoin [BTC] would fall below $25,000. This became a reality in mid-July when the price briefly dipped below the mentioned level. But what does this mean for future performance?
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The prediction was based on BTC’s lower range being limited above an ascending support line. Bitcoin’s latest retest of the same support line has already yielded some accumulation, leading to some upside.
While the press performance could mark the latest local bottom, a sustained rally is not guaranteed and there is a significant chance of further price weakness.
Source: TradingView
Despite the uncertainty about its price going forward, Bitcoin holders have important considerations to consider. For example, the next Bitcoin halving is fast approaching and could have a significant impact on BTC demand.
Bitcoin historically has robust accumulation against each halving. A similar outcome over the next 10 months would favor the bulls in the second half of 2023.
About 10 months left until the Bitcoin halving.
Until then, the market will likely be in an accumulation zone.
Historically, large and dramatic price increases have occurred following the halving.
18-24 months until the next bull peak.
I bought, retweet if you went too!
— Lark Davis (@TheCryptoLark) June 17, 2023
Assessment of the state of Bitcoin accumulation
Bitcoin’s ability to bounce back strongly will depend on the level of demand currently in the market. Demand is largely driven by whales and can be measured by activity in the derivatives segment. Whales with more than 1,000 BTC have been unloading coins in the past four weeks.
Source: Glassnode
Addresses containing at least 1,000 BTC closed at the lowest monthly level on Friday. Since then they show signs of slight accumulation. Open interest on Bitcoin futures also fell significantly over the past 4 weeks, but recovered slightly on Wednesday.
Whale farms previously retested current levels between March and May. The same levels can support a strong psychological buy zone.
Interestingly, the exchange flow data confirmed that the amount of Bitcoin currently flowing out of the exchanges is higher than the amount flowing in. In other words, BTC was experiencing a resurgence in demand at the time of writing.
📊 Daily on-chain exchange flow#Bitcoin $BTC
➡️ $783.2 million in
⬅️ $839.5 million out
📉 Net Flow:- $56.3 million#Ethereum $ETH
➡️ $260.7 million in
⬅️ $254.0 million out
📈 Net Flow: + $6.7 million#Tether (ERC20) $USDT
➡️ $497.9 million in
⬅️ $420.4 million out
📈 Net Flow: + $77.5 millionhttps://t.co/dk2HbGwhVw— glassnode alerts (@glassnodealerts) June 18, 2023
Read the Bitcoin price prediction for 2023/2024
Despite these findings, demand for Bitcoin in the market was relatively low at the time of writing, especially when compared to periods of high demand. While the slight upward trend may indicate that the market is poised for a recovery, it does not necessarily guarantee such an outcome.
Prices can still fall, especially if market conditions don’t support a potential rise.