As a seasoned crypto investor with years of experience in this market, I share the perspective presented by CryptoQuant’s analyst Gustavo Faria. Bitcoin’s current trading range seems to lack the momentum that fueled its significant growth periods in the past. The absence of substantial increases in the global money supply and a decline in retail investor FOMO are notable indicators of this trend.
Based on the present market situation, it’s plausible that Bitcoin will stay inside its current price range until a more advantageous macroeconomic context emerges. Considering the elements at play, such as profitability, borrowing power, and coin age distribution, the terrain indicates a more robust surge within this particular Bitcoin cycle.
CryptoQuant’s analyst aims for a mark around the time of the predicted initial US rate reduction in September.
Bitcoin Trading Lacks Momentum
For approximately the last two months, Bitcoin has exhibited limited price fluctuations. Historically, Bitcoin’s major expansion phases have been associated with sizeable expansions in global liquidity (M2), suggesting periods of abundant resources and heightened investor risk tolerance.
During these phases, there was typically a surge of fresh capital entering the market. This trend frequently culminated in peaks fueled by retail investors’ anxiety not to miss out on potential opportunities (FOMO).
It’s intriguing that this trend hasn’t manifested during the present market cycle based on the analysis of CryptoQuant by their expert, Gustavo Faria.
Although global liquidity experienced a modest increase over the past year, boosting Bitcoin’s value, the annual growth rate of M2 has recently reverted back to typical levels. This shift was triggered by reliable inflation figures in the US, causing investors to revise their predictions for 2024 interest rate reductions from five to two.
Potential for a More Expressive Rally
As an analyst examining the data from an on-chain intelligence platform, I haven’t observed any clear indications of a sudden increase in demand that would substantially boost prices based on the current information available.
From a supply perspective, the urge to sell among long-term investors and short-term traders has dwindled. Long-term investors, who have grown accustomed to the price hovering around $60,000, have become less inclined to offload their holdings. Meanwhile, short-term traders, who previously saw profitability in quick sales, have scaled back on selling due to decreased potential profits.
As a crypto investor, I believe we’re currently in a phase where the market is likely to continue its sideways trend. However, based on the current market conditions, such as profitability, leverage, and coin age distribution, there’s a strong possibility that a more significant rally lies ahead within this cycle. Let’s wait for the triggers that will prompt a decisive change in the market direction.
As an analyst, I believe the most plausible outcome is that Bitcoin will continue to trade within its current range until a more advantageous macroeconomic backdrop materializes. This favorable scenario might be triggered by the anticipated first US interest rate reduction in September. With this economic shift, demand could surge once again, fueling a new rally and signaling the pinnacle of the Bitcoin cycle.
As a crypto investor, I believe Mike Novogratz from Galaxy Digital made a compelling case during his recent statement. He suggested that Bitcoin’s price might oscillate between the $55,000 and $75,000 range in the near term. This perspective is based on his expectation that the Federal Reserve will not reduce interest rates until a later stage.
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2024-05-15 09:34