Bitcoin Poised for "Banana Zone" Surge Conditional on Three Key Market Trends
Summary:
The price of Bitcoin could soon enter a remarkable surge phase known as the "Banana Zone" after a dull period called “The Boring Zone." However, three significant trends need to change for a steady recovery, according to CryptoQuant analyst. These include a reduction in Bitcoin miner selling following a 55% drop in mining revenue, an increase in stablecoin inflows due to decreased market liquidity, and a decrease in outflows from Bitcoin exchange-traded funds (ETFs). Bitcoin's trading price currently sits at $64,966, a 2.35% decline in the past 30 days, which could reportedly signal a market bottom.
The price of Bitcoin (BTC) might soon undergo a significant upswing, entering a phase dubbed as the "Banana Zone". But before this happens, three crucial trends must change course, say cryptocurrency market experts. Coined by Raoul Pal, Global Macro Investor founder, the "Banana Zone" refers to a significant rise in Bitcoin's price. On June 18, Julien Bittel, GMI head of research, suggested that this phase could only follow a rather dull period termed "The Boring Zone".
An individual using the pseudonym 'IT Tech' from CryptoQuant, suggested that for a steady recovery three "critical" aspects need an alteration. Firstly, Bitcoin miners' selling needs to dwindle, which has seen a rise ever since the mining revenue experienced a 55% drop. Since hitting an all-time high of $73,679 in March, Bitcoin's value has plunged causing the daily revenue generated from transaction fees and block rewards to drop by roughly 56%, as per Blockchain.com data.
Secondly, the absence of "new issuances" in the stablecoins market has led to reduced liquidity and affected price volatility, suggesting a need for an uptick in stablecoin inflows. In the past couple of months, the amount of stablecoins in crypto exchange reserves has dropped almost 10%, as per CryptoQuant data.
Lastly, 'IT Tech' emphasized the need to curb outflows from Bitcoin exchange-traded funds (ETFs) such as Grayscale Investments and Fidelity, hinting that these are adding selling pressure on Bitcoin. As per Farside data of June 18, Bitcoin Wise Origin Bitcoin Fund (FBTC) from Fidelity and Grayscale Bitcoin Trust ETF saw outflows of $83.1 million and $62.3 million, respectively.
These factors have pushed Bitcoin's trading price down 12% from its March all-time high. Bitcoin currently trades at $64,966, a 2.35% decline in the past 30 days. 'IT Tech' thinks this might mark the "market bottom." Major altcoins, including Solana (SOL), Dogecoin (DOGE), and Shiba Inu (SHIB) have seen larger declines in the past week.
Commenting on Bitcoin's static price, Bittel noted that it signifies a "sideways chop" period. Other traders, like Rekt Capital, anticipate a significant directional shift soon, marking a potential break from the Bitcoin's persistent June downtrend. The information in this article does not constitute financial advice or recommendations and is subject to market risk. Readers should independently research before engaging in trading or investment decisions.
Published At
6/19/2024 6:15:19 AM
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