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- BTC bulls managed to take advantage of the previous decline to test the $61,000 ceiling.
- The critical task now is to hold the $64,000 level; missing this level could lead to a likely retracement.
Bitcoin (BTC) is approaching its late-August high of $64,000. Until it breaks through this resistance, the potential for a breakout remains uncertain as underlying factors could disrupt momentum, delaying a breakout if conditions collapse.
Bitcoin Market Makes Profits
A year ago, Bitcoin participants were suffering losses, as indicated by a net RPL ratio close to zero. In other words, the amount of BTC sold at a loss was high.
This usually happens during times of high volatility, when stakeholders lose confidence in the trend reversal.
Source: BGeometrics
A year later, the Bitcoin market is now making substantial profits, which encourages players to hold their assets for future gains. The Fed’s rate cut has certainly fueled this trend.
However, the market remains in a neutral phase. A significant surge could push the net RPL ratio into the green, potentially signaling a market top, according to AMBCrypto.
In summary, the market has not yet reached its top, which indicates a bullish outlook and potential for future growth. The key question is whether bulls will capitalize on this trend or pull back for more modest gains.
LTHs benefit from BTC price dip
Historically, sharp drops in the supply of BTC held for more than 155 days often signal market tops, as holders sell for profits, leading to price declines.
The latest instance occurred at $71,000, where BTC’s retracement below $55,000 saw an increase in supply volume, indicating that long-term holders bought the dip.
Source: Bitcoin Magazine Pro
This is in addition to the optimismthat large holders view $64,000 as a price floor, accumulating for future gains and targeting the next resistance around $70,000.
Overall, the rate cut has complemented this strategy, increasing the likelihood of a rebound and strengthening confidence in holding the asset.
Caution is advised
It’s no surprise that Bitcoin is vulnerable to perpetual market fluctuations. Currently, long positions dominate speculative trading, with institutions refraining from shorting Bitcoin.
Source: Coinglass
A similar pattern emerged early last week in August, with long positions exceeding short positions for three days, creating conditions ripe for a short squeeze.
Read Bitcoin (BTC) Price Prediction for 2024-25
Yet BTC then dropped from $64,000 to below $55,000 the next day as shorts regained dominance. Overall, to avoid repeating this scenario, it is essential to hold $64,000.
Although current charts are favorable to the bulls, caution is advised. Otherwise, a A retracement to $55,000 remains a possibility if bears regain control.
