Heres What an Analyst Means by Saying Lower Bitcoin Prices Could Trigger a Rally to New Highs
A prominent on-chain analyst closely monitoring developments believes that a significant downturn could serve as the catalyst for a Bitcoin (BTC) surge to new highs.
During a recent interview on the What Bitcoin Did podcast, the analyst known as Checkmate discussed on-chain data indicating a notable decrease in selling pressure on BTC since April, when many offloaded their holdings near record peaks. Despite this, Checkmate noted that Bitcoin continues to struggle to maintain its upward momentum due to a lack of fresh buying interest.
“The peak during the ETF surge, where about 30% involved GBTC but not exclusively, saw considerable selling. However, subsequent spending has markedly diminished,” Checkmate observed. “In theory, bulls should encounter less resistance pushing prices higher. Yet, the fact that we haven’t seen upward movement suggests a missing second wave of demand.”
Checkmate forecasts that Bitcoin may need to dip to lower levels to reignite investor enthusiasm before initiating the next phase of its bullish cycle.
“Typically, markets require a catalyst… And what’s often the prime catalyst? Lower prices. Whether through a sudden drop prompting opportunistic buying akin to March 2020, albeit not predicting such an event, or establishing a bear market floor,” Checkmate stated. “Frequently, markets need to decline before rallying, prompting media to attribute causes like Mt. Gox or Saylor. Essentially, the absence of sufficient demand has kept us sideways… Until a marginal buyer emerges, markets tend to drift downwards.”
As of the latest update, Bitcoin is valued at $60,660.
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