After six weeks of turbulence, starting in June when Bitcoin fell by more than 15%, the currency is returning to normal. At the time of writing, prices continue to post higher highs, hovering above $62,000.
Bitcoin Recovers From Weakness
According to one analyst, pointing According to on-chain metrics provided by CryptoQuant, Bitcoin is in the process of breaking through a milestone. There could be more gains in the coming weeks or months. Technically, Bitcoin is in a bullish breakout formation, with a close above $60,000 essential to boost confidence.
According to analysts, Bitcoin bulls have been dealing with a wave of fear, uncertainty, and doubt (FUD) in recent weeks. It is worth noting that the decision of German authorities to sell 50,000 BTC worth billions of dollars has dented the sentiment.
The situation got worse when Mt. Gox creditors said they planned to distribute the coins in July, not October. On July 16, Kraken reportedly sent an email to recipients stating that they planned to distribute Mt. Gox BTC in the coming days.
The Bitcoin price crash during most of June, which culminated in a selloff in early July, caused outflows from spot Bitcoin ETFs. Unlike in previous months, when investors were eager to gain exposure to spot ETFs, the crash prompted some holders to buy back their shares, accelerating the downward trend.
At the same time, the US Federal Reserve announced that it would cut rates only once this year, not three times as economists had predicted. This This means that interest rates will remain higher than expected, clear bearish trend for risky assets like Bitcoin and cryptocurrencies.
The Major Turnaround: Bitcoin Trades High, Miners Are Relieved
However, the turnaround took place this weekend. According to the analyst, attempt The evolution of Donald Trump’s life has only increased the likelihood that the former president will succeed Joe Biden. Trump has changed his stance on Bitcoin and cryptocurrencies, even encouraging mining activity in the country.
The weekend liftoff comes on the heels of a surge in liquidity, particularly for major stablecoins like USDT and USDC. Now that prices are higher, the analyst also noted that short-term holders (STH) are back in the green after prices broke above $62,700.
The price increase has also translated into increased income for miners. As things stand, miners are no longer in the “extremely underpaid” zone. For this reason, few of them will have any incentive to sell.
The rising valuation also means that Coinbase customers are paying a premium to receive BTC. This indicates that momentum for even bigger gains is gradually building, which is a huge step forward for buyers.
Main image from Canva, chart from TradingView
