Since its August 5 low of about $49,557, the price of bitcoin BTC has increased by almost 22%, and analysts think that onchain and technical indicators indicate that the recovery will continue. A lot of analysts are forecasting a possible increase in Bitcoin that may see its price reach $68,000 by September as it continues its remarkable comeback from recent lows. Given that the current value of Bitcoin is approximately $60,783, a number of significant factors point to the possibility that this lofty goal may be achievable. Here’s a closer look at the three main variables influencing this bullish prediction.
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Exchanges’ supply of bitcoin falls
The sharp decline in Bitcoin’s supply on controlled exchanges is one of the most revealing indicators of its possible comeback. The quantity of Bitcoin held on these sites as of August 23 has dropped from 3.01 million BTC to roughly 2.68 million BTC, an 11% decline since the start of the year. This decrease in supply suggests that investors and dealers are increasingly choosing to keep onto their Bitcoin instead of exchanging it for fiat money or other assets.
A smaller supply on exchanges usually indicates that buyers are more optimistic about Bitcoin’s long-term prospects and would rather hold onto their holdings in expectation of future price increases. Less Bitcoin is available for purchase, which causes the supply and demand ratio to change in favor of rising prices and lays a solid basis for further expansion.
Onchain data that tracks the supply of Bitcoin on exchanges suggests that the price of the cryptocurrency may rise over the next weeks.
Centralized cryptocurrency exchanges owned roughly 2.68 million BTC as of August 23, down 11% from $3.011 million BTC on January 1. This is happening in tandem with a 43% increase in Bitcoin’s value year to far.
Exchanges’ declining quantity of BTC tokens suggests that traders would rather keep them than swap them for fiat or other assets. Thus, there is a greater chance that Bitcoin will continue its 2024 bull run if demand doesn’t decline.
Maybe institutional investors will keep buying Bitcoin as they pump money into spot exchange-traded funds (ETFs). US-based spot Bitcoin ETFs have seen positive flows in nine of the previous 13 trading days, according to data from Farside Investors, indicating that institutional demand in these financial products is still present.
Onchain data tracker CryptoQuant, however, saw a decline in inflows into spot Bitcoin ETFs, stating that last week’s daily average was 1,300 BTC and that these are only a small portion of their March total.
Analysts at CryptoQuant pointed out that for Bitcoin to reach new all-time highs, there has to be significant institutional demand for the spot Bitcoin ETFs.
Whales of bitcoin are amassing
Large addresses in Bitcoin continue to have strong demand for the cryptocurrency, according to data that Sentiment tracks.
Interestingly, during the past six weeks, Bitcoin whale addresses with 100–1,000 BTC have added over 94,700 more coins to their collection.
Important participants, or Bitcoin whales, are piling up as price volatility has scared off many traders from the cryptocurrency space.
This is in line with a 13% increase in the market value of Bitcoin from its low of $53,550 on July 5. This suggests that whales bought the token throughout the declines. In other words, major BTC holders think the cryptocurrency’s value may increase even more in the coming month.
The price of bitcoin breaks above a pennant
The price of BTC has been stabilizing within what seems to be a bull pennant since it reached its lowest point on August 5 at $49,557.
A bull pennant is a continuation pattern that is bullish and shows up when an asset makes a strong move higher and then consolidates in a triangle-shaped price range. Usually, it breaks out of the range to the upside and aims for a profit goal at a length that is equivalent to the breadth of the triangle.
It seems that for the coming weeks, the price of BTC is aiming for a similar breakout scenario. At $60,300, which is the pennant’s upper trendline, it is currently trading above. Bulls have an upward breakthrough objective of almost $68,000, or a 12.4% increase from current prices, if they manage to hold above the mentioned resistance level.
On August 22, when the price of BTC surged beyond $61,800, the 200-day exponential moving average (EMA) around $59,446 came back into support. This has strengthened the strong negative support that BTC possesses, according to data from IntoTheBlock.
According to its in/out of the money around price (IOMAP) model, the 200-day EMA is located between $58,653 and $60,465 in price range, where around 1.77 million addresses previously purchased 919,470 BTC.
Over the next weeks, further purchasing from this demand zone may push the price of BTC higher, bolstering the market’s optimistic outlook.
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Spot Bitcoin ETFs and Institutional Demand
Strong institutional interest in BTC is still present, especially when it comes to buying spot BTC exchange-traded funds (ETFs). Nine of the last 13 trading days have seen positive flows into US-based spot BTC ETFs, according to data from Farside Investors, indicating continued institutional involvement.
It’s important to keep in mind, too, that according to recent statistics from CryptoQuant, inflows into these ETFs have decreased from levels seen in March. Despite this, the price of BTC must be driven higher by institutional demand. Reviving spot ETF sales could be crucial to increasing demand for BTC as a whole, which would fuel a price increase.
The heightened demand for these products from institutional investors may provide BTC the push it needs to overcome its current resistance levels and go toward the $68,000 mark.
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Technical Evaluation and Formation of Bull Pennants
A bull pennant pattern, a traditional technical indicator that suggests a possible bullish continuation, has recently emerged in the price movement of BTC. Following a sharp upswing, the price of BTC has been stabilizing within a pennant-shaped range, after hitting a low of $49,557 on August 5.
A breakout to the upside is usually the outcome of the bull pennant pattern, with a price target equal to the triangle’s width. At $60,300, BTC is currently trading above the top trendline of the pennant. The break-out goal is about $68,000 if the price sticks with this position and stays above the resistance level.
Furthermore, August 22 saw a move above $61,800 for BTC, which turned the 200-day exponential moving average (EMA) from resistance to support. This technical advancement provides additional backing and suggests that BTC has a strong base on which to rise over the next few weeks.
Conclusion
Based on these three important factors—the notable decrease in supply on exchanges, the persistence of institutional demand through spot BTC ETFs, and the bullish technical pattern of a bull pennant—Bitcoin’s trajectory towards $68,000 by September looks positive. Even while market conditions are subject to change, all of these signs point to a high probability of sustained growth for BTC. As always, investors need to be on the lookout and incorporate these elements into a more comprehensive investing plan.
