After reaching $61,885 yesterday evening (11), Bitcoin began to fluctuate downward. At around 8:30 this morning (12), it fell to $58,073, a drop of nearly 6%.
At present, last night's decline was the deepest correction since the rally from $49,000 last week. If BTC fails to hold above $57,500, the next support level is around $54,500 (Fibonacci 0.618 and trading concentration area).
The trend of Ethereum is similar to that of Bitcoin. It climbed to $2,700 yesterday evening and then fell all the way. At the time of writing, the lowest price was $2,509, down 3.36% in the past 24 hours.
Currently, $2,500 is a trading-intensive area. If it fails, it may challenge the previous low of $2,400.
What volatility risks should we pay attention to this week? First, the United States will release inflation data such as CPI: the United States will announce important economic indicators such as the Producer Price Index (PPI) on August 13 and the Consumer Price Index (CPI) on August 14. These will become the basis for the Federal Reserve and the market to judge whether inflation is moving further in the right direction and when to start cutting interest rates.
The second is the economic data of European countries: this week, the UK and the eurozone will update important economic data such as GDP and CPI. Faced with growing concerns about a recession in the United States, market investors are observing whether this situation shows signs of spreading globally.
In general, the price is within the normal fluctuation range. What is really worth noting is that the recent "coin hoarding wave" has reappeared. What kind of signal does this trend contain? Can the market take this opportunity to set off a new round of bull market?
Over the past month, more than 99,000 Bitcoins have been withdrawn from major centralized exchanges (CEX). The current Bitcoin reserves of exchanges total 2.67 million Bitcoins, the lowest since the bear market in November 2018. At the same time, the Ethereum reserves of centralized exchanges have also dropped to a low point not seen in many years. Currently, exchanges hold a total of 16.8 million Ethereums, and a total of 11.44 million Ethereums have been lost since September 2022, with a value of more than $29 billion.
The surge in outflows from exchanges means that investors are transferring their digital assets from exchanges to "hoard coins". The logic behind this behavior is that investors expect the price of Bitcoin to rise in the future, and most investors believe in the principle of "no keys, no coins, coins and keys are one" (Not your keys, not your coins), so they usually transfer cryptocurrencies to cold wallets for safekeeping when long-term beliefs are high, in order to facilitate long-term holding.
Analysts point out that when investors remove a large amount of Bitcoin and Ethereum from exchanges, it also means that a large amount of supply is removed from the open market, which leads to tight supply and increased buying pressure. Therefore, the phenomenon of "hoarding" of a large amount of funds flowing out of exchanges is often regarded as a "bullish signal."
In addition, data shows that since the beginning of 2024, more than 1.9 million BTC have been transferred to super wallets (including spot ETFs and custodial wallets, but excluding exchanges), the number of BTC held by major investors (commonly known as whales) has surged, and the activity of Bitcoin whales has reached an all-time high. This trend came after the recent market crash, which some analysts believe marks the lowest point of the cycle before the start of the next bull market, and people are increasingly confident in the long-term potential of Bitcoin.
More indicators show why BTC is the “hot pick” in the market right now. The MVRVZ score, a key tool for finding market highs and lows, is currently reading below 2. This shows that Bitcoin is in undervalued territory and has not yet reached its peak. Those who claim that the top has been reached may be missing out as investors and traders are likely to make significant gains in the fourth quarter of 2024.
Meanwhile, Bitcoin’s dominance surged to a new short-term high last week, a strong sign of an impending rally. While the exact timing is uncertain, this growing momentum suggests that Bitcoin is about to see a major uptick. A bull run is gradually forming, and when it fully begins, Bitcoin is expected to experience a parabolic rise.
Overall, despite the recent decline in the cryptocurrency market, the continued increase in outflows from exchanges has made people optimistic about the future trend of Bitcoin. With the arrival of a series of important economic data and policy meetings, market volatility is expected to increase further. For investors, it is a safe strategy to pay close attention to these dynamic changes and make good risk assessments and response preparations.
