3 reasons why Bitcoin won’t be ‘boring’ in September
2024.08.20 05:14
Bitcoin’s (BTC) price closed below its 200-day exponential moving average (EMA) for the second week in a row, but over the past 24 hours, it has rebounded above $60,000. Several charts indicate that long-term holders remain unfazed by the current price action. Is a bullish breakout possible after August?
Bitcoin long-term holder realized cap hits $3 billion
BTC price has closed below the 200-day EMA only three times in 2024. As the chart below shows, July 4 marked the first bearish close under the 200-day EMA.
The BTC/USD pair reclaimed a position above the EMA in less than ten days. This time around, the asset spent less than 24 hours before it was back above the indicator, confirming that bullish momentum is slowly picking up this week.
BTC/USD 1-day chart. Source: Trading View
Bitcoin investors can be divided into short-term holders (STHs) and long-term holders (LTHs). They have different trading strategies and time preferences.
STHs are investors or traders engaging in day trading or scalping, focusing on quick returns during a relatively shorter period. Many of these are retail or low—to medium-net-worth individuals or entities.
On the other hand, LTHs consist of traders undertaking a long-term buy-and-hold strategy for at least six months. Many of these entities represent high-net-worth individuals or large organizations, particularly in the era of Bitcoin ETFs.
Recent data suggests that the LTH’s realized market capitalization change recorded a positive net value of $3 billion, previously observed in December 2023.
The Bitcoin realized cap is the cumulative sum of all realized profits minus realized losses. In other words, the aggregate value has flowed into the Bitcoin onchain, minus capital flowing out via losses.
Bitcoin long-term holders net position realized cap. Source: crypto quant
Amr Taha, a crypto analyst, highlighted the above change in realized market cap and stated,
While STH increases selling, This indicates that LTH continue to accumulate While STH is being selling at a worse price.
BTC miner’s selling pressure flatlines
Bitcoin miners have been selling BTCs through exchanges as their net flow decreased in Q2 2024. However, the selling pressure has flattened out over the past two weeks as miners’ reserves are beginning to show signs of a trend reversal toward accumulation.
Bitcoin miner reserve. Source: crypto quant
The chart shows that the miner’s selling pressure decreased significantly in August, suggesting that BTC could stabilize at its current price range before next month.
Stablecoin Supply Ratio leans bullish
One of the key bullish arguments for Bitcoin has been the fact that global liquidity is beginning to increase, namely the global M2 money supply.
Similar to global liquidity, the stablecoin supply ratio, or SSR, also indicates how much liquidity is available in terms of stablecoins that can be used to buy Bitcoin.
SSR is defined as the ratio of the total crypto market cap to the aggregated market cap of all stablecoins. A decreasing ratio indicates that the supply of stablecoin is rising while the market cap is lagging, which means more liquidity is available to buy assets.
Stablecoin Supply Ratio or SSR chart. Source: crypto quant
At the moment, the SSR ratio is down to early February 2024 levels, which means there is a lot of liquidity available in the market, which can trigger a possible rally.
Julio Moreno, head of research at CryptoQuant, also pointed out the same development, highlighting that the total stablecoin market cap has reached a new all-time high of $165 billion. He added, “This implies higher liquidity in the crypto markets.”
BTC price nears “ChoCH” level above $62K
After a disappointing weekly close, Bitcoin has witnessed a bullish revival with a 4.50% return over the past 2 days. At the moment, BTC is attempting to breach above a descending broadening channel pattern, which can have bullish implications.
BTC/USD 1-day chart. Source: TradingView
However, Bitcoin faces strong resistance right above the pattern at $61,700. A confluence of 50-day and 100-day EMAs is also right around that price point, which indicates that it can continue to deny a bullish breakout.
If Bitcoin is able to break above the collective resistance offered by the EMAs and $61,700, a bullish reversal will be confirmed if BTC crosses above $62,737. In September, This can result in a market signal called “ChoCH or “Change of Character” —a sign of trend reversals.
