Bitcoin (BTC) has experienced a dramatic rollercoaster in recent days, marked by a significant flash crash that saw its price plummet to $49,188 on Monday, representing a 15% drop within a single day.
Notably, this sharp decline has been primarily driven by new market entrants, specifically new whales. On August 5, this group executed their largest sale since May 2021, resulting in a substantial $688 million loss, according to on-chain data, while existing whales largely retained their holdings.
That said, despite this recent drop, Bitcoin has shown a remarkable recovery, sparking renewed optimism among investors for a potential upswing. The recent volatility has also led to a surge in buying activity from major investors. According to Ki Young Ju, CEO of CryptoQuant, over the past 30 days, Bitcoin worth around $23 billion has been moved to long-term holder addresses, reflecting a clear trend of unprecedented accumulation.
“I’m pretty sure something is happening behind the scenes. 404,448 Bitcoin have been moved to permanent holder addresses over the past 30 days, indicating a clear trend of accumulation. We’ll know within a year.” Ju tweeted on Tuesday.
Other, analysts also remain optimistic about Bitcoin’s future despite recent volatility. Looking on-chain, “ShayanBTC” an analyst at CryptoQuant, noted recent analysis of funding rates, a key metric for assessing market sentiment, reveals a notable drop, with negative rates indicating a bearish mood primarily driven by short sellers. However, according to the pundit, this shift could signal the end of an overheated futures market and pave the way for a more sustainable bullish trend in the coming months.
Furthermore, on Thursday, analyst Burak Kesmeci highlighted the Bitcoin NVT Golden Cross metric, which indicates a local bottom area for the third time in 2024. This metric helps identify buy and sell zones in short-term trends. Kesmeci noted that previous signals from this metric, such as those in January and July, preceded significant price increases. As of now, the metric suggests Bitcoin is in a local bottom area, signaling potential for a short-term positive trend.
Additionally, technical analysis supports a bullish outlook for Bitcoin. The cryptocurrency has been developing a broadening wedge pattern marked by rising buying pressure, as indicated by Onchain charts. Veteran trader Peter Brandt and other analysts suggest this bullish continuation pattern could lead to a significant price surge.
CryptoQuant analysts, on the other hand, describe the pattern as a bullish flag. They believe a breakout from this formation could drive Bitcoin’s price to $100,000-$110,000.
At press time, Bitcoin was trading at $59,087, reflecting an 8.85% surge over the past 24 hours and a 5.43% decline over the past week.
