(Kitco News) – Bitcoin (BTC) bulls battled bears for control of support at $60,000 in early trading on Thursday after bulls spent the week flipping the psychologically important level back to support after bears flipped it to resistance last Wednesday.
Data provided by TradingView shows that since hitting a low of $56,158 last Thursday, Bitcoin’s choppy price action has established a series of higher lows and higher highs, suggesting that bulls are gaining ground on bears.
BTC/USD 4-hour chart by TradingView
Zooming out to higher time frames shows that BTC's price is starting to coil into a tighter range, indicating that a breakout is on the horizon. Wednesday’s spike above $61,000 pushed BTC past the midpoint on the Bollinger Band indicator, a sign that its price could continue higher in the near term, potentially aided by rising sentiment around interest rate cuts.
BTC/USD 1-day chart by TradingView
“The crypto market gained 1.7% in the last 24 hours to reach $2.14 trillion, continuing to test August's resistance,” said Alex Kuptsikevich, senior market analyst at FxPro. “Bitcoin rose 2.6%, while Ethereum (ETH) gained 1.2%.”
“Crypto market sentiment indices are approaching neutral territory thanks to a weaker dollar and growing confidence in an imminent interest rate cut,” he noted. “Bitcoin is trading around $60.8K, hesitant to grow but not far from its 50-day average. The dynamics of the last few days show a transfer of capital from cautious sellers (who may have received funds from Mt. Gox) to long-term buyers accumulating ETFs.”
Bitcoin’s range-bound trading between $58,000 and $62,000 comes amid a pullback in activity from institutional investors, who have moderated their acquisitions considerably compared to the scramble that was seen in the first half of the year following the launch of the first U.S. spot BTC exchange-traded funds (ETFs).
“According to CryptoQuant data, major Bitcoin investors have slowed their monthly coin accumulation rate to 1%, compared to the 3% average typical of bull markets,” Kuptsikevich said. “Most demand metrics are showing weakness, which is not enough for a new all-time high. The alternative in the form of spot Bitcoin ETFs is also unreliable, with daily net inflows into the instruments at a fraction of March's levels.”
Analysts at 10x Research also see weakness in the Bitcoin chart and said a significant policy change or a major news event is needed to push BTC above $65,000.
"We anticipate that this recent rally could extend slightly but will likely encounter resistance around the $65,000 level,” the analysts wrote. “Achieving a more substantial surge would require a significant policy shift or major news event.”
Some of the recent weakness for Bitcoin has been attributed to an uptick in selling by miners. Data from CryptoQuant shows that over-the-counter (OTC) trading desks have seen a surge in deposits from miners in recent weeks.
“Bitcoin OTC desk balances for miners have increased by more than 70% over the past three months, rising from 215,000 BTC in June to 368,000 BTC in August – an increase of 153,000 BTC,” CryptoQuant contributor EgyHash wrote. “These balances have not reached such levels since June 2022.”
“Miners often turn to OTC deals to sell Bitcoin, seeking better execution without impacting the market price as they might on exchanges,” EgyHash said. “The substantial rise in OTC desk balances suggests significant selling activity among miners. Historically, increases in Bitcoin OTC desk balances have been associated with declines in Bitcoin prices.”
However, with interest rate cuts on the horizon, which has led to rising sentiment around risk assets, technical analyst CryptoCon warned that now is not the time to exit Bitcoin positions as positive price action is set to pick up in the coming months.
“Leaving #Bitcoin now is leaving before everything gets exciting!” CryptoCon tweeted. “The same resistance and same support on the Puell Multiple cycle after cycle.”
“You're in the last valley before the highest mountain,” he concluded. “The calm before the storm, up that is!”
While Bitcoin is showing signs of strength on Thursday and currently trades at $60,695, an increase of 1.97% on the 24-hour chart, the broader markets showed weakness. The major indices are all trading in the red at the time of writing, while spot gold is down 1.43% on the session and trading below $2,476 per ounce.
