Bitcoin’s Nearly Three-Month Rally Faces Weakened Momentum
- Bitcoin’s nearly three-month rally faces weakening buying pressure.
- Analysts report momentum fading for Bitcoin’s recent uptrend.
- Profit-taking is increasing among short-term holders of Bitcoin.
- ETF inflows have significantly influenced Bitcoin’s price trajectory.
- Institutional interest remains critical to Bitcoin’s future movements.
Bitcoin’s Rally: Momentum Fades Amid Profit-Taking
Bitcoin’s recent rally, which has lasted almost three months, appears to be losing vigor as buying momentum slips and traders begin to cash in on their profits. Analysts from Bitfinex highlighted this changing tide in a market report issued on Monday, pointing out that for the first time during this bullish stretch, momentum indicators are fading. Bitcoin (BTC) rebounded from a year-to-date low of $73,273 on April 9, climbing approximately 41% to reach $107,380, according to data from CoinMarketCap around that time.
Consolidation Phase Possible Amid Changes in Buying Pressure
Nevertheless, Bitfinex’s analysts cautioned against expecting further surges in price, citing order flow data and on-chain metrics that suggest a consolidation phase could be imminent. They remarked that there has been a discernible cooling in spot trading volume coupled with reduced buy pressure, as many short-term holders decide it is a sensible time to take profits, particularly after riding Bitcoin’s bounce from below the $80,000 mark. While some market participants are anxious about this price movement, they also underline the critical link to external factors, including institutional demand through ETF inflows that could dictate Bitcoin’s next steps.
Outlook Tied to Institutional Demand and Economic Factors
Moreover, the outlook for Bitcoin is intertwined with insight from significant economic factors and prevailing institutional trends, particularly with regard to ETF inflows. Spot Bitcoin ETFs in the U.S. reportedly recorded inflows for a continuous stretch of 14 days since June 9, cumulatively reaching $4.63 billion through June 27, as per Farside data. Notable economist Timothy Peterson has labeled the recent $2.2 billion inflow as notable, adding that he anticipates a positive trend in the coming week, which traditionally correlates with price rebounds for cryptocurrencies. Traders are now scripting their strategies while they observe the Federal Reserve’s impending interest rate meeting on July 30, where any potential rate decreases could bode well for Bitcoin.
In summary, Bitcoin’s current rally is showing signs of fatigue as buying pressure diminishes and profit-taking becomes more prevalent. Analysts warn of a possible transition into a consolidation phase, heavily influenced by macroeconomic elements and ETF inflows. While there are concerns among traders, some analysts remain optimistic that once selling pressure from long-term holders eases, Bitcoin could resume its upward journey.
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