Bitcoin remains in an uptrend from a top-down view, looking at performance on the daily chart, especially in Q1 2024. Bulls seem to be gaining the upper hand, with the coin floating above $60,000.
There is an oversupply of Bitcoin: will prices fall?
Not everyone is convinced that the upward trend will last, at least based on on-chain activity. Speaking to X, one analyst sharp to the changes in the Bitcoin Spent Volume Lifetime chart. The analyst noted a 10X increase in BTC movements from previous highs.
The massive inflow, a staggering $9 billion, coincides with Mt. Gox’s planned user compensation in July, which was originally scheduled for October. The analyst says the fear with the flood is that it could trigger a selloff, sending prices down further.
The impact of Mt. Gox’s accelerated release of BTC to victims from October to July triggered a massive selloff in late June. While prices recovered over the weekend, there needs to be a convincing close above $63,000, marking June 24. If buyers persist, with $60,000 serving as a base, any break above $66,000 would be ideal and could pave the way for even bigger gains in the short to medium term.
Technically, even with gains, the bears are still in control. As things stand, the coin is in a bearish breakout formation after June 11, when prices dropped, triggering the move for a drop below $66,000.
Analysts remain optimistic: Bitcoin likely to recover from weakness
While the current rally is raising concerns, some believe that the selling pressure associated with Mt. Gox may be overdone. In response to the analyst’s assessment, one user said that Mt. Gox users are likely early adopters of the technology, with a clear understanding of what Bitcoin offers.
Therefore, even if the defunct exchange distributes coins, they will not have an incentive to sell on the fly. Furthermore, the anticipated selling pressure has likely been factored in, which has dampened attempts to push prices down.
Another analyst, responding to fears of an increase in BTC supply, said. However, the graph of the lifetime of Bitcoin spent volume paints a picture of a potential deluge; the entity-adjusted version, which rejects internal transactions, reveals a more muted picture.
Based on this assessment, the analyst is convinced that the influx of BTC supply from Mt. Gox Creditors will probably be less dramatic than initially feared.
Main image from Canva, chart from TradingView
