Bitcoin has consolidated for over 6 months now, printing lower highs and lower lows. I follow the Coinbase Premium Index closely, to gauge buy and sell pressure from the US market.
In general, strong US buy pressure tends to push the Coinbase Premium Index higher above 0, while strong US sell pressure pushes the index below 0.
I noticed a trend forming with every lower high being printed during the past 6 months. Every time BTC formed a lower high, the Coinbase Premium Index was below 0, suggesting buy pressure was drying up, being overwhelmed with sellers.
The chart below highlights these occurrences (on an hourly chart). In my opinion, in order for Bitcoin to breakout of the 6 month consolidation, and especially the multi month downtrend line around $65.9k (as of 9/27/24), we need to see the Coinbse Premium firmly flip positive and remain positive.
In other words, we need strong and consistent US buy pressure to come in at these levels to trigger a breakout.
The global macro backdrop is very bullish when considering global central banks have been easy monetary policy, the Federal Reserve just cut the Fed Funds Rate by 50 bps, DXY has been declining, with the market about to enter Q4, a historically bullish period, especially on a post halving basis.
With leverage, anything can happen in crypto, so I wouldn't be surprised to see near term liquidations to the upside and downside. We should expect a breakout higher in the next few weeks if not months as Bitcoin enters Uptober, if we see a positive Coinbase Premium Index along.
Keep in mind, the US election is very uncertain, so its possible the next significant leg higher for Bitcoin could come after the election, when certainty returns to the market.
Written by DanBTC916
