It’s all so tiresome… Will BTC ever break out of the range it’s been trapped in?
Whereas price action is boring – except for the one scare we had in early July – our outlook is bullish.
Let’s dive in.
Market RoundupThe boring post-halving phase has lived up to its reputation. Three months in, the BTC price hasn’t really moved, despite some heavy chop.
It was good to see that the early July dip was bought up pretty fast.
Since, we’ve hovered above the 50-day exponential moving average, testing it on August 1st. A bounce would be nice. Around 65k is the short-term holder realized price, which would be nice to reclaim as support.
In these choppy conditions, it’s always good to zoom out. This is the monthly chart for BTC.
We are just consolidating. The tireless chop on the daily chart looks like a nice bull flag on the monthly chart.
All in all, the market has calmed down just below the all-time high after a rapid rise. This is an indication that this is a pause in a larger bull market, and not the beginning of a new bear market.
What helps is the tailwind of the recent Bitcoin halving, which is already more than 100 days behind us. In previous cycles, this 100-day period signaled the end of the boring post-halving phase and the beginning of a huge rally.
Macro Backdrop
On July 31st, as expected, the Fed held interest rates steady. But they hinted that they are nearer to easing monetary policy and cited ‘some further’ progress on inflation. So we’re likely 6 weeks away from a September rate cut. This gives the market the right set-up to rally.
The Trump talk at the Bitcoin Conference in Nashville was maybe not as insanely bullish as some onlookers expected – unlike Robert Kennedy jr., Trump didn’t announce plans to buy BTC as a treasury reserve asset – it is still a sight to behold having a former president speak so casually appreciative about Bitcoin. Bullish.
Global liquidity is in the uptrend of the cycle, which is also great.
Taking into account how high the correlation is between this global liquidity index and the Bitcoin price, it becomes clear we’re on the right trajectory.
Next, let’s look at the BTC spot ETFs net inflows. Since early July, they’re on the rise again.
On a multi-year timeframe, it looks like a giant inverse head-and-shoulders pattern has formed (or a cup-and-handle, if you want to discard the 2021 shoulder, as it was deeper than the recent correction). This chart screams breakout. The question is when: it could be anytime, it could take a few more months.
Ethereum
The launch of the Ethereum spot ETFs was a big success. The trading volume on the first day (around 1 billion dollars) exceeded the expectations of most analysts.
Price is a different matter, of course. The Ether price dipped around 7% in the eight days following the ETF launch.
This is no cause for concern however. Remember that the BTC price dipped a similar amount back in January in the week post-launch (10%).
Only two weeks post-launch BTC started to rally – big time. Let’s wait and see if Ether will behave in a similar way.
Plume Incentivized Testnet
If you haven’t already joined the fun over on Plume, it’s…
Hi! My name is Lark Davis!
I’m a cryptocurrency investor with years of experience and I’ve been making consistent profits in the crypto space.
I’m passionate about helping others do the same, so I run multiple educational channels on crypto investing.
