Bitcoin’s grip on its multi-month consolidation range has loosened, with a confirmed weekly breakdown. But is this cause for panic, or is there a bullish twist waiting to be revealed? While fear grips the market (the fear and greed index sits at a chilling 28), a glimmer of hope remains above $38,000.
On Monday, during the early European session, Bitcoin’s price hovered around $55,422, while the fear and greed index dropped further to 28, indicating increasing fear among investors.
Is there any hope for a market recovery in the coming months? Let’s delve deeper to find out.
Is a Recovery On the Way?
This recent breakdown hints at the possibility of lower price targets. However, a return to the previous consolidation range would necessitate a weekly close back within that range, which seems unlikely given the current close. The weekly RSI is nearing the lows of August/September 2022, and another red weekly candle could potentially set up a bullish divergence.
For the first time since last October, Bitcoin’s price has consistently closed below the 200-day Moving Average (MA) for the past five days. If Bitcoin reclaims the 200-day MA as a support level, it could increase the chances of a bullish recovery in the fourth quarter.
Understanding the Market
Recent bearish pressure on Bitcoin can be attributed to increased whale selling. The German government offloaded over $85 million in Bitcoin, and US-based Bitcoin ETFs have seen low demand. Miners are also selling BTC to cover costs.
The market is now looking to the US Federal Reserve for economic clarity, with expectations of a rate cut later this year and a general election potentially sparking a crypto-bullish outlook.
A Major Catalyst: FTX’s Liquidity Distribution
Ash Crypto recently highlighted a significant upcoming event that could propel the crypto market to new heights: the distribution of over $16 billion in stablecoin liquidity. This liquidity boost stems from FTX’s plan to reimburse its creditors, a development that could set the stage for substantial market growth in late 2024 and early 2025.
$𝟭𝟲,𝟬𝟬𝟬,𝟬𝟬𝟬,𝟬𝟬𝟬 𝗜𝗡 𝗦𝗧𝗔𝗕𝗟𝗘𝗖𝗢𝗜𝗡 𝗟𝗜𝗤𝗨𝗜𝗗𝗜𝗧𝗬 𝗪𝗜𝗟𝗟 𝗘𝗡𝗧𝗘𝗥 𝗧𝗛𝗘 𝗠𝗔𝗥𝗞𝗘𝗧 🚨
PEOPLE ARE WORRIED ABOUT MT. GOX DUMP AND THE OTHER BEARISH FACTORS, BUT THERE’S SOMETHING THAT WILL TAKE THE CRYPTO MARKET TO NEW HIGHS.
THE FTX IS PLANNING TO… pic.twitter.com/YjoVw6lCOs
— Ash Crypto (@Ashcryptoreal) July 7, 2024
Key dates to watch are August 16, when FTX customers will vote on the distribution plan, and October 7, when Judge Dorsey will decide on its approval. If approved, the reimbursement process will begin in Q4 2024 and continue into Q1 2025.
What Does the Future Hold?
This massive influx of funds coincides with other bullish market factors, such as potential rate cuts, new FASB accounting rules, and US election results, all of which could further boost the crypto market.
Ash Crypto believes this $16 billion injection will act as a powerful catalyst for higher crypto prices. Bitcoin is projected to surpass $120,000, Ethereum could climb above $12,000, and many altcoins might experience 10x-50x growth. For those keen on capitalizing on this opportunity, now is the time to stay informed and prepared for the upcoming market surge.
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