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Cryptocurrency News Articles
Bitcoin (BTC) Could Be Gearing Up for Another Short-Term Rally, Despite Recent Struggles
Oct 13, 2024 at 05:00 am
The first half of October is almost done and while there were high expectations for Uptober, a contrarian outcome played out.
Despite recent difficulties in maintaining bullish momentum, Bitcoin might be setting up for another short-term rally. The first half of October is almost over, and while there were high expectations for Uptober, the outcome was contrarian.
The fact that Bitcoin extended its downside this week and even dipped below $60,000 may have further crushed any bullish October expectations. However, a recent CryptoQuant analysis suggests that a strong bullish outcome is still possible in the short term and may have already begun.
The analysis showed that Bitcoin is currently in an accumulation phase, as indicated by the Coinbase Premium Gap metric. According to the analysis, whenever the BTC Coinbase premium dropped below -50, a surge in accumulation followed.
The Bitcoin Coinbase premium gap recently dipped significantly below -100. So, does this also indicate a large amount of accumulation?
Demand is outpacing sell pressure at lower price points
Bitcoin’s price action so far this week aligns with the analysis.
The cryptocurrency was trading at $63,667, at press time, after bouncing back by over 6% from its weekly low on Thursday. The strong rebound confirmed high demand at and below the $60,000 price range.
Source: TradingView
It is also worth noting here that strong bullish momentum returned after the price retested the 0.5 and 0.618 Fibonacci range, based on its lowest and highest price levels in September.
This suggests that there is a high probability of accumulation/demand returning after retesting this zone.
The gap between exchange inflows and outflows widened following the dip below $60,000. Notably, Bitcoin exchange outflows were higher at 3156 BTC in the last 24 hours, compared to 1972 BTC during the same period. This seemed to confirm that there was more buy pressure than sell pressure.
Source: Cryptoquant
On-chain data also highlighted significant whale activity during the week.
We observed a rise in large holder flows over the week, with inflows peaking at 8,590 BTC on 10 October. This was significantly higher than large holder outflows, which peaked at 7,960 BTC during the same period.
Source: IntoTheBlock
Since then, large holder flows have cooled slightly. However, inflows still outpaced outflows, indicating a net increase in whale liquidity.
These findings, taken together, suggest that Bitcoin may be preparing for another leg up. It is unclear, however, whether the current momentum will extend beyond the short term. For the time being, the recent rebound confirms that sub-$60,000 prices may still be considered a good discount.
Disclaimer:info@kdj.com
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