If history repeats itself, Bitcoin is primed for a bearish month, but the current price action does highlight a rarely seen opportunity.
from ARK Invest said that short-term Bitcoin investors had no choice but to capitulate in August as the percentage of Bitcoin supply in profit fell by 14 percentage points.Although many traders view significant price dips as buying opportunities at this point in the Bitcoin halving cycle, a notable bearish move was Bitcoin’s price falling below its 200-week moving average for the first time since June 2023.
As shown in the chart below, the 200-WMA generally acts as a key support level during major downtrends and ARK suggests that any future bearish catalysts could see BTC price fall as low as $20,300 where its realized price currently resides.Despite the rather dismal short-term outlook for the crypto market, a more optimistic view of Bitcoin’s dip below the 200-WMA would highlight the fact that dips below realized price and the long-term moving averages presented cyclical buying opportunities.
Comparing market participant sentiment from 2018-2019 to the current market sentiment, Lilly suggests that today’s price action reminds him of the pre-reversal period in 2019 when “we were in a winter, everybody was low energy, nobody cared about bitcoin or crypto.” Stablecoin marketcap data also reflects the absence of bullish investor sentiment, and according to ARK, the fact that “the 90-day supply of aggregate stablecoins has dropped more than 20% from $162 billion in March 2022 to $120 billion today” is illustrative of the decline in market liquidity and investors' confidence in engaging with Bitcoin and altcoins.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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