In the latest market analysis by technical analyst Willy Woo, it was noted that Bitcoin inventory on exchanges has been experiencing a bearish trend until the start of August. This was primarily due to a significant influx of around 100,000 BTC from the German and US governments selling, as well as Mt. Gox distributions. Woo pointed out that speculation has been rampant, leading to the creation of more paper Bitcoin in the form of derivatives such as futures and options. However, the market crash in early August played a role in flushing out much of this paper Bitcoin and leverage that had been keeping markets suppressed. According to Woo, this was a healthy reset of open value in the market, as overheated speculation can hinder Bitcoin’s ability to climb.
Woo also emphasized the need for Bitcoin price action to become more stable, stating that the market needs to get really boring. He mentioned that the market is around 66% of the way there, with much of the speculation having dissipated and more spot BTC being absorbed. In terms of supply and demand dynamics, there has been a recovery from a short-term bearish sentiment to a delicately neutral one. Despite the recent market fluctuations, Woo remains optimistic, stating that Bitcoin is not in a bear market but rather going through a prolonged consolidation phase.
Peter Brandt, another respected analyst, highlighted that the current bull market cycle could soon become the longest post-halving period in history before reaching a new all-time high. This might suggest that achieving a new all-time high in this cycle may not be immediate. On the other hand, ITC founder Benjamin Cowed shared a more positive view, stating that Bitcoin’s progression through the market cycle aligns well with historical trends. Despite hitting a weekly high of $61,800, Bitcoin’s price has slightly retraced to just over $60,500 during the latest Asian trading session.
Market Outlook and Resistance Levels
Despite the selling pressure from government entities and failed exchanges, Bitcoin has remained range-bound following its recent dump. Analyst ‘Rekt Capital’ pointed out that breaking the resistance level at $61,420 would be crucial for establishing a new uptrend in the current market scenario. As the market continues to evolve and absorb the recent influx of Bitcoin, it will be interesting to see how price action and market dynamics play out in the coming weeks.
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