Bitcoin has been consolidating for over six months, consistently printing lower highs and lower lows. The Coinbase Premium Index, which measures buy and sell pressure from the US market, has been a critical indicator during this period. Strong US buy pressure typically pushes the index above 0, while strong sell pressure drives it below 0.
Throughout the past six months, every lower high in Bitcoin's price has coincided with the Coinbase Premium Index being below 0, indicating that buy pressure has been consistently overwhelmed by sellers. To break out of this six-month consolidation and the multi-month downtrend line around $65.9k, we need to see the Coinbase Premium Index flip positive and remain so, signaling strong and consistent US buy pressure.
The global macroeconomic backdrop is bullish, with central banks maintaining easy monetary policies, the Federal Reserve cutting the Fed Funds Rate by 50 basis points, and the DXY declining. As we enter Q4, a historically bullish period, especially post-halving, the conditions are ripe for a potential breakout.
While short-term volatility is expected, a positive Coinbase Premium Index could trigger a breakout in the coming weeks or months. However, the uncertainty surrounding the US election could delay significant upward movement until after the election when market certainty improves.