Bitcoin has three months until the bull market resumes, but it could still see 300% gains by 2026, according to a fresh analysis by the pseudonymous engineer Apsk32.
On July 9, Apsk32 posted on X, revisiting his power law metric to project Bitcoin’s future performance. The power law provides a lower BTC price support band that has held since BTC/USD traded at just $1.
Additional bands, or “time contours,” offer further price information, ultimately suggesting a $1 million price target for 2036.
“Time contours tell us how long it will be before the support forces current prices upward.
For 12 years, every bear market has returned to this support line,” a previous X post from June explains.
“The support passes one million dollars in 2036 and bitcoin isn’t stopping there.”
By mapping past price action onto the current four-year cycle, Apsk32’s analysis explains current market behavior, including the ongoing 25% drop from March’s $73,800 all-time highs.
“If bitcoin’s cycle pattern continues, price should remain inside or near this blue cloud,” the latest post summarized.
“The ETFs pushed us out of the cloud and now we’re reverting back.
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“We’re 3+ months away from upwards acceleration and we could see prices go up 4x by the end of 2025.”
An accompanying chart shows the “Power Law Fractal Cloud” — a guideline range for BTC/USD moving forward.
“Does the price have to stay within the cloud? Absolutely not,” Apsk32 acknowledged.
“This time could be different, in fact it already is.”
As Cointelegraph reports, Bitcoin traders are bracing for further BTC price declines amid a climate of fear across the crypto market.
Sub-$50,000 levels have come back into focus, aligning the current drawdown with previous ones.
Optimism, however, is fueled by reduced selling by Bitcoin miners over the past month and a return to net inflows for U.S.-based spot Bitcoin exchange-traded funds (ETFs).
On July 8, ETFs saw inflows of nearly $300 million, marking their best single-day tally in over a month, according to data from sources including UK-based investment firm Farside Investors.
“Looks like the boomers & institutions are buying the dip here, while Germany offloads a bunch of coins,” popular trader Jelle wrote, contrasting ETF buying with BTC sales by the German government.
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The German government has continued its Bitcoin sell-off, moving approximately 3,100 BTC worth around $178 million within an hour on July 9.
Additionally, they withdrew about 1,700 Bitcoin, valued at $91.78 million, from Bitstamp, recouping BTC holdings from the exchange.
At the time of writing, the government has shifted another 3,107 BTC from its main holdings, likely preparing for an imminent sell-off.
The primary government address holds around 26,000 BTC worth $1.5 billion, while the off-loading address holds 4,800 BTC worth $276.61 million.
According to Arkham Intelligence, since 7:30 am UTC on July 9, there has been a total outflow of 3,100 BTC.
Of this, 2,500 BTC were sent to an unknown B2C2 Group, 400 BTC to the centralized exchange Kraken, and 200 BTC to an unknown wallet.
The German government sold an additional $900 million worth of BTC on July 8, indicating plans to continue gradually selling its remaining $1.5 billion in Bitcoin holdings.
The 16,309 BTC sold is now worth over $930 million despite the mass sell-off, suggesting buyers remain confident at this price range.
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Wall Street traders anticipate a 72% chance of the US Federal Reserve cutting interest rates in September, which could boost investment in BTC.
This macroeconomic trend tends to significantly impact assets like BTC, seen as a risk-on asset, unlike gold, which attracts liquidity during geopolitical instability.
Alongside the BTC sell-off, a reduction in BTC miner activity and reserve sell-offs suggests market sentiment might be nearing its bottom.
According to Bitfinex analysts, July 6 and 7 market data indicated a local bottom, despite Mt. Gox starting its BTC and Bitcoin Cash (BCH) repayments.
Despite the BTC sell-offs by the German government and Mt. Gox repayments, several indicators suggest BTC is poised for a rebound.
BTC reached its lowest point since late February, dropping to $53,550 before rebounding to current highs of $57,600.
The relative strength index (RSI) showed a growing divergence between the falling price and rising RSI value, suggesting weakening sell pressure.
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Bitcoin’s significant sell-off might offer buy-and-hold enthusiasts a chance to purchase BTC ETF shares at lower prices.
Spot Bitcoin dropped to around $53,500, a four-month low, on Friday due to anticipated large BTC liquidations by Germany’s government and Mt. Gox, the defunct Japanese crypto exchange.
The share prices of major BTC ETFs are already being affected, and continued market volatility could lead to appealing discounts.
Bitcoin ETFs, such as Franklin Templeton Digital Holdings Trust (EZBC), VanEck Bitcoin Trust (HODL), and iShares Bitcoin Trust (IBIT), have become the benchmark for spot BTC holders since U.S. regulators approved these publicly traded funds in January.
However, the robust protections and security measures of these funds have resulted in shares trading at persistent premiums to their net asset value (NAV) since their inception, driven by institutional investments.
As of early July, the top five Bitcoin funds traded at an average premium of nearly 1%.
ETFs rely on a select group of professional market makers called “authorized participants” (APs) to maintain ETF share prices aligned with the fund’s NAV.
These APs are the only traders allowed to exchange and redeem BTC ETF shares for spot BTC, profiting from intraday pricing spreads.
Currently, only a few APs are equipped to handle BTC spot trading, making ETF shares susceptible to sharp price movements in volatile markets.
The ongoing liquidations by Germany and Mt. Gox could introduce billions of dollars of sustained selling pressure, leading to volatility and potentially wider ETF price swings, creating arbitrage opportunities for traders.
If traders are hoping for an arbitrage similar to the Grayscale Bitcoin Trust (GBTC) discounts of late 2022, they might be disappointed.
The GBTC situation, where shares traded at discounts approaching 50% of NAV, is unlikely to reoccur due to vastly improved liquidity and increasing institutional investor awareness of BTC’s value.
Bitcoin funds have already seen $398 million in net inflows since the recent sell-off.
Nevertheless, significant opportunities might still be available.
In May, shares of BlackRock’s IBIT ETF briefly dipped to a discount of nearly 2% during institutional end-of-month rebalances amid market volatility.
Other funds, including FBTC, BITB, and ARK 21Shares Bitcoin ETF (ARKB), also traded at discounts of nearly 1.5%.
With upcoming BTC liquidations from Germany and Mt. Gox, market volatility is expected to rise.
Investors should monitor ETF arbitrage opportunities closely, especially in EZBC, HODL, and IBIT, which offer attractive management fee discounts, some waiving fees entirely until 2025.
Traders willing to navigate the current volatility may find benefits.
Despite the selling pressure, BTC could see a bullish turnaround by year-end, driven by potential Federal Reserve interest rate cuts and favorable odds for Donald Trump in the upcoming U.S. presidential election.
Now is the time to look for discounts.
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Blockchain-focused asset manager DigitalX has secured regulatory approval to launch its spot Bitcoin exchange-traded fund (ETF), marking the second Bitcoin ETF to trade on the Australian Securities Exchange (ASX).
Scheduled to list under the ticker BTXX on July 12 at 10 am local time, the DigitalX Bitcoin ETF’s approval was announced in a July 8 post on X by the firm.
Describing the approval as a “watershed moment,” DigitalX CEO Lisa Wade stated, “The DigitalX Bitcoin ETF is a spot ETF product that provides ASX customers with direct access to Bitcoin via a regulated and liquid fund structure.”
DigitalX’s chair Toby Hicks added, “It is exciting to see the growth and development of the digital assets markets reflected in this approval” in Australia.
To bring this product to market, DigitalX has partnered with K2 Asset Management, which will act as the responsible entity and issuer of the spot Bitcoin ETF.
Additionally, DigitalX will collaborate with 3iQ, a cryptocurrency-focused investment firm, to promote and distribute the product both in Australia and internationally.
This development follows closely behind the ASX’s approval of VanEck’s spot Bitcoin ETF on June 15, which began trading on June 20.
The VanEck Bitcoin ETF (VBTC) recorded $1.3 million in trading volume on its first day, significantly lower than the $450 million daily average seen by the nine U.S.-based spot Bitcoin ETFs during their initial 10 trading days.
In a related note, Australian fund manager Betashares is also pursuing a Bitcoin ETF on the ASX, according to an April report from Bloomberg.
The DigitalX Bitcoin ETF aims to capitalize on the increasing interest in digital assets, offering a regulated avenue for investors to gain exposure to Bitcoin.
As the second Bitcoin ETF on the ASX, BTXX is poised to attract both local and international investors looking to diversify their portfolios with digital currencies.
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Bitcoin mining difficulty saw a significant drop of over 5% on July 5, reaching a quarterly low of 79.50 terahashes per second (TH/s).
This reduction was the most substantial since March, when it briefly dipped below 80 TH/s. After spiking between March and May to an all-time high of 88.10 TH/s, the difficulty gradually settled to its current level at the time of this writing.
Bitcoin mining difficulty is quantified by hashrate, representing the number of attempts a mining machine makes to solve the cryptographic puzzle required to unlock a Bitcoin.
Hashrate updates occur every 2,016 blocks, approximately every two weeks. Generally, Bitcoin’s hashrate has increased monthly, with few exceptions.
In 2014, the hashrate was around 1.1 gigahashes per second, allowing most desktop PCs to mine Bitcoin.
As hashrate increases, more powerful and energy-efficient mining rigs are needed for profitability.
By the end of 2017, as Bitcoin adoption surged, the hashrate crossed the terahash threshold for the first time. As of July 6, 2024, the hashrate stands at 79.5 TH/s, awaiting the next difficulty adjustment.
Under the current difficulty of 79.5 TH/s, F2Pool, a prominent mining pool, suggests that an ASIC rig with an efficiency of 26 watts per terahash or better would remain profitable as long as Bitcoin’s price stays above $54,000.
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“With a $BTC price of $54k, ASICs with Unit Power of 26 W/T or less can make a profit. We estimate this at $0.07 per kWh,” F2Pool stated.
Should Bitcoin’s price fall below this threshold, more efficient mining rigs would be necessary to sustain profitability.
However, if the price remains stable, conditions are expected to be favorable for major miners, especially those in regions offering energy subsidies for mining operations.
In summary, the recent decrease in mining difficulty presents an intriguing shift in the Bitcoin mining landscape, affecting profitability and operational strategies for miners worldwide.
The industry will closely watch upcoming difficulty adjustments and market conditions to navigate these changes effectively.
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United States-based spot Bitcoin exchange-traded funds (ETFs) saw significant inflows on July 6, notably after Bitcoin’s price decreased to under $54,000 on July 4.
Farside Investors reported that these spot Bitcoin ETFs registered their largest net inflows for the month, attracting $143.1 million.
The Fidelity Wise Origin Bitcoin Fund (FBTC) received the most with $117 million, followed by the Bitwise Bitcoin ETF (BITB) which saw $30.2 million.
Additionally, the ARK 21Shares Bitcoin ETF (ARKB) and the VanEck Bitcoin Trust (HODL) ETFs gained $11.3 million and $12.8 million, respectively. However, the Grayscale Bitcoin Trust (GBTC) experienced a net outflow of $28.6 million.
Despite the market’s instability, the robust inflows into these ETFs indicate that institutional investors and significant buyers are seizing the opportunity to purchase Bitcoin at reduced prices during the downturn.
Hunter Horsley, CEO of Bitwise Asset Management, emphasized the efficiency of his team in acquiring Bitcoin at less than half a basis point.
He remains optimistic about Bitcoin’s future, presenting the current market conditions as an excellent opportunity for both new and existing investors.
“The outlook for Bitcoin has never been stronger.
“For many who don’t yet have exposure, this week is a chance to buy the dip,” he said.
In the same week, the BITB ETF saw inflows exceeding $66 million, bringing its total Bitcoin holdings to over 38,000 BTC.
Bitcoin critic Peter Schiff also weighed in on the situation.
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Despite the market’s volatility, he noted the resilience of Bitcoin ETF investors who have maintained their holdings without panic.
“So far, there’s no sign of panic.
“It will likely take a much larger drop in Bitcoin before they finally capitulate,” Schiff stated.
He speculated that a significant sell-off might be imminent, potentially leading to widespread capitulation among Bitcoin holders.
The decline in Bitcoin’s price was partly triggered by the transfer of 47,229 Bitcoin by the defunct Japanese crypto exchange Mt. Gox.
This marked its first significant transaction since May, moving the coins, worth approximately $2.71 billion at that time, to a new wallet address.
Bitcoin’s price briefly fell to $55,200 on Coinbase following the transfer.
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In a recent commentary on X, dated July 5, Ki Young Ju, the CEO of onchain analytics firm CryptoQuant, addressed the concerns surrounding government sell-offs of Bitcoin (BTC).
He emphasized the relatively minor impact of these sell-offs on the overall market, advising traders not to react impulsively to such events.
Ki stated, “Don’t let government selling FUD ruin your trades.”
He highlighted that the amount of Bitcoin being offloaded by governments globally is insignificant when compared to the massive inflows the cryptocurrency market has experienced.
Since the onset of the latest bull market, the crypto space has seen nearly $250 billion in inflows, whereas the total potential government sales of BTC amount to less than $10 billion.
Ki further explained, “Govt Bitcoin selling is overestimated,” adding, “$224B has flowed into this market since 2023. Government-seized BTC contributes about $9B to the realized cap.”
This perspective offers a calm contrast to the recent volatile price movements in BTC, which have been influenced by government actions and the ongoing transfers from accounts associated with the defunct exchange Mt. Gox.
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The primary sellers in focus are Germany and the United States, with Germany holding approximately 41,200 BTC confiscated from criminal activities, as reported by Arkham, a crypto intelligence agency.
Despite the prevailing nervous market sentiment, as indicated by the Crypto Fear and Greed Index nearing “extreme fear,” Ki believes the panic induced by government actions alone is disproportionate.
He reasoned, “It’s only 4% of the total cumulative realized value since 2023,” reinforcing his earlier statement, “Don’t let govt selling FUD ruin your trades.”
As the market continues to monitor critical support levels, the narrative remains cautious but observant of potential rebounds.
Current evaluations place the supertrend floor at $52,000, with potential scenarios predicting a dip to $45,000, aligning the current downturn with historical trends.
Moreover, established bull market supports such as the 200-day moving average and Bitcoin’s short-term holder cost basis are currently pegged at $58,550 and $64,175, respectively.
On a related note, Bitcoin hit a four-month low of $53,500 on July 5 but saw a modest recovery, trading approximately $3,000 higher the following day, according to data from Cointelegraph Markets Pro and TradingView.
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Bitcoin recently saw a rebound, rising 6.40% on July 6 to a value of $56,975 after experiencing a five-month low the previous day.
This resurgence suggests traders are starting to mitigate the bearish impacts triggered by Mt. Gox’s massive $8 billion BTC reimbursement and recent BTC selloffs conducted by the U.S. and German governments.
Efforts to stabilize market perceptions have been ongoing among leading cryptocurrency analysts.
They seek to diminish concerns surrounding the substantial sell-offs and emphasize Bitcoin’s robust long-term prospects.
Ki Young Ju, the CEO of CryptoQuant, highlighted that the $8 billion in government-controlled BTC represents a small fraction—just 4%—of the $225 billion infused into the Bitcoin market since 2023.
This perspective underlines the market’s capability to handle such disruptions without destabilizing effects.
Furthermore, liquidity concerns related to possible future actions by the German government, which holds about 42,000 BTC, are also being downplayed.
Market analysts reassure that the Bitcoin market is resilient enough to absorb potential impacts if these holdings were to be sold off.
Trader Tardigrade, an independent analyst, drew comparisons between the current market scenario and past significant market events, often referred to as ‘black swan’ events.
He said, “In 2016, 2020, and 2024, $BTC moved in the same pattern.
Besides 2020, $BTC Fakeout was seen below the trendline. After reclaiming above trendline, a Bull Run follows,” suggesting that the current situation could similarly lead to a robust market recovery and an ensuing bullish phase.
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Rekt Capital, another analyst, noted that the current sell-offs align with the typical cycles observed post-Bitcoin halving events, which historically lead to a temporary price decline as the market adjusts to reduced supply.
However, this phase is often followed by a price surge driven by decreased supply coupled with heightened demand.
Bitcoin’s rebound was also partly influenced by positive movements in the U.S. stock market, with the S&P 500 hitting a record high in a post-holiday trading session that noted a thin volume.
This spike in equities came despite data indicating a slowdown in U.S. hiring and an increase in the jobless rate, prompting predictions of a potential interest rate cut in September, which is generally favorable for Bitcoin and other higher-risk assets.
The effects of these broader economic indicators were mirrored in the cryptocurrency markets.
For example, on July 5, following the release of U.S. jobs data, Bitcoin ETFs saw an influx of $143.1 million after experiencing outflows in the preceding days.
Additionally, Bitcoin’s futures market showed increased funding rates, although open interest dropped, indicating a phase where less confident investors exit while others increase their stakes, anticipating a price rise.
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CryptoQuant, a market intelligence firm, has observed indicators that Bitcoin miner capitulation metrics are nearing levels similar to those seen after the FTX crash in late 2022, suggesting a potential bottom for Bitcoin prices.
Miner capitulation occurs when miners scale back operations or sell part of their mined Bitcoin and reserves either to sustain themselves or to “earn yield or hedge their Bitcoin exposure.”
In recent times, as Bitcoin’s price declined by 13% from $68,791 to $59,603 over the last month, signs of capitulation have become more evident.
One significant indicator of this trend is the decrease in Bitcoin’s hashrate, which is the total computational power used to secure the network.
This hashrate has fallen by 7.7% to 576 EH/s, reaching a four-month low after previously hitting a record high on April 27.
This drop in hashrate mirrors a similar reduction seen in late 2022, which historically correlated with the market bottoming out at $15,500 before a subsequent 300% increase in Bitcoin’s price over the following 15 months.
CryptoQuant’s analysis also points out that since the last Bitcoin halving, miners have been substantially undercompensated, as shown by the miner profit/loss sustainability indicator.
This has resulted in a 63% reduction in miners’ daily revenues from $79 million on March 6 to $29 million currently, with revenues from transaction fees dropping to just 3.2% of the total, marking the lowest since April 8.
READ MORE: Bitcoin Drops Below $58,000 for First Time in Two Months Amid Major Liquidations
Moreover, the decline in revenue has compelled miners to dip into their reserves to generate yield, leading to a notable increase in daily miner outflows, the highest since May 21.
This trend suggests that miners might be selling off their Bitcoin reserves.
Despite significant outflows in May, they remained below extreme levels (twice the 1-year average), indicating a measured approach to selling.
The overall impact of these sales, combined with those from Bitcoin whales and national governments, has pressured Bitcoin’s price to a four-month low of $53,499 on July 5.
Furthermore, the downturn has affected the ‘hash price,’ a metric of mining profitability per unit of computational power, which now stands at $0.049 per EH/s, barely above the record low of $0.045 seen on May 1.
Reflecting on the broader implications, a report from Cantor Fitzgerald highlighted that major mining firms could face significant challenges if Bitcoin prices were to drop to $40,000, underscoring the precarious situation of the mining industry.
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On July 4 bitcoin experienced a dip of over 2%, testing a key support line for the first time since October 2023.
Data from Cointelegraph Markets Pro and TradingView revealed new local lows of $57,885 on Bitstamp following the latest daily close.
This decline was driven by a lack of positive sentiment and consistent selling pressure from spot markets, creating a challenging environment for Bitcoin bulls.
CoinGlass reported that 24-hour Bitcoin long liquidations approached $60 million at the time of writing.
Popular trader Skew noted that BTC/USD had crossed its 200-day moving average (MA) for the first time in ten months.
“So far since trend rejection & reversal around $63.8K spot selling has been the main driver of this trend,” he explained on X.
“So in order for this HTF MA to actually act as a systematic trigger for the market we need to see market demand & reversal signs. Else volatility & momentum pick up to the downside.”
At the time of writing, the 200-day MA was at $58,400, slightly below the spot price after a brief low timeframe bounce.
READ MORE: Bitcoin Drops Below $60,000 Amid Potential $9 Billion Mt. Gox Payout and Whale Activity
Looking at the broader picture, trading suite DecenTrader highlighted a significant amount of long liquidations closer to $50,000 if the price continues to decline.
“If Bitcoin does breakdown then $51k – $52k remains the area where there is a significant amount of 3x, 5x, and 10x longs liquidity. To the upside, the shorts liquidity is at $76k-78k,” it noted.
Charles Edwards, founder of Capriole Investments, pointed to clear factors influencing Bitcoin’s recent downside.
Alongside data from on-chain analytics firm Glassnode, he observed significant sell-side pressure throughout the year.
The launch of United States spot Bitcoin exchange-traded funds (ETFs) in January had failed to absorb this pressure.
“This is why we haven’t mooned yet. Saylor, Michael Dell, ETFs. It’s all noise,” he told his followers on X.
“When you look at the data of the 4 most important players in Bitcoin, we have net flows equivalent to $24B being dumped on the market in 2024.”
Edwards emphasized that ETFs are not the only demand factor in the current market.
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