As per the analysis of market conditions, Bitcoin is expected to stay within its current trading range until a more favorable macroeconomic environment presents itself. Factors such as profit margins, leverage, and the distribution of coin ages all play a role in shaping the landscape for the cryptocurrency. The current scenario hints at a more expressive rally within this cycle, with the target set around the projected first US interest rate cut in September.
Looking back at previous growth periods for Bitcoin, it becomes evident that substantial increases in the global money supply (M2) have played a crucial role. These periods have been characterized by ample liquidity and high investor risk appetite, leading to an influx of new capital into the market. However, the current cycle seems to deviate from this pattern, as observed by CryptoQuant’s analyst Gustavo Faria. Despite a slight uptick in global liquidity over the past year, the change in M2 has returned to normal levels due to consistent inflation data in the US.
On the demand side, there is a lack of immediate signs pointing towards a surge that could significantly boost prices. The on-chain intelligence platform’s data indicates a stagnation in demand. However, the selling pressure has decreased as long-term holders (LTHs) have witnessed price stability around $60k, and short-term holders (STHs) have reduced sales due to decreased profitability. This equilibrium suggests that the market is likely to continue its lateral movement until new triggers emerge.
Considering the current market conditions and the dynamics of supply and demand, there is potential for a more substantial rally within this cycle. It is probable that Bitcoin will continue to trade within the existing range until a more conducive macroeconomic environment arises, possibly coinciding with the anticipated first US interest rate cut in September. This catalyst could stimulate a fresh wave of demand and set the stage for a peak in the cycle. Galaxy Digital’s Mike Novogratz has also echoed a similar sentiment, predicting that BTC’s price will fluctuate between $55,000 and $75,000 until the Fed implements rate cuts.
The future of Bitcoin in the current trading range appears to be contingent on external macroeconomic factors and triggers that can ignite a significant shift in the market dynamics. While the landscape suggests a potential rally within this cycle, the cryptocurrency is likely to remain restrained until a more favorable environment emerges.
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