While Bitcoin remains steady at around $60,000, the market shows signs of a potential accumulation phase. After a notable rejection of August lows, Bitcoin managed to climb back above the $60,000 level, reaching as high as $63,000 by the end of last week. This recovery has created optimism, although the daily chart indicates that Bitcoin’s price is currently moving sideways in a pattern bounded by the August 8 bullish engulfing bar.
Despite the overall optimism, the cryptocurrency market is experiencing a period of quiet and, some might say, boredom. One analyst, referencing on-chain data, pointed out the low market activity. Over the past seven days, the Bitcoin netflow has been recorded at -8,748 BTC. This net negative flow suggests that more Bitcoin has been purchased than sold, indicating an accumulation phase amidst the general market lull. This accumulation trend is seen as a positive indicator for Bitcoin’s price stability, especially considering the recent dip to $49,000 on August 5.
The accumulation pattern aligns with the broader cryptocurrency market behavior. Bitcoin, alongside other major cryptocurrencies like Ethereum and XRP, appears to be in a bullish recovery phase following the early August crash. Although the August 8 bull bar lifted market sentiment, there has been no significant follow-through. Current resistance for Bitcoin stands at $63,000, with support levels between $57,000 and $60,000. If buyers manage to break the $63,000 resistance, it could pave the way for another upward movement towards the $70,000 mark and potentially new all-time highs.
Supporting this potential for upward movement is the low risk of miner liquidation. On-chain data from Glassnode indicates that Bitcoin is currently in a holding phase, with users keen to accumulate. This increased accumulation at current lower prices suggests a strong confidence among traders and investors, anticipating further gains in the near future. Additionally, miners seem to pose minimal threat to this bullish outlook. Following the Halving event in late April, miners did engage in significant selling throughout June, which pressured prices downward. However, the situation now appears more stable, with the hash rate—the measure of computational power—on the rise.
One analyst notes that daily miner revenue fell by approximately 60% following the Halving, dropping from $75 million to around $30 million. Over the last 720 days, miners’ reserves have decreased by 50,000 BTC due to necessary sales for equipment upgrades. Despite this liquidation, miners are not in immediate danger, as their reserves continue to hold over 713,000 BTC. This stability in miner behavior, combined with strong accumulation trends, suggests that the market is setting up for potential growth in the forthcoming days.
