Bitcoin is currently facing a critical test, having retreated more than 19% from local highs and holding above the key demand level around $54,000 that supports the market structure. This level is the last line of defense for BTC, and if broken, a deeper correction could occur.
Analysts and investors are actively sharing their insights, with many of them analyzing market data to assess Bitcoin’s next move. CryptoQuant CEO Ki Juvenile Ju recently shared key data that sheds lightweight on the current situation. His analysis highlights on-chain metrics that provide a clearer understanding of why Bitcoin is struggling to maintain its value.
He also provided a forecast for Bitcoin’s performance in the final months of the year, outlining what investors should be paying attention to as market conditions develop. As the year progresses, these insights can assist market participants navigate the volatility surrounding Bitcoin’s price action.
US Demand Key to Bitcoin Rally
Bitcoin (BTC) is currently experiencing significant selling pressure, largely attributed to a noticeable drop in demand. The latest shared data by Ju, reveals that Coinbase’s dominance in spot Bitcoin trading volume has returned to pre-ETF levels. The change underscores a significant drop in U.S. demand, a key factor supporting the bullish momentum seen earlier this year.
Ju emphasizes that for Bitcoin’s growth cycle to regain strength, a rebound in US demand is imperative. He predicts that this rebound could occur in the fourth quarter of 2024, suggesting that we are currently in the middle of a market cycle, having not yet reached the retail bubble phase. This outlook means that there is still plenty of room for growth as the market develops.
The current phase reflects a period of consolidation rather than a final decline, indicating that Bitcoin’s price dynamics are fluctuating as demand trends change. Investors should be aware that while short-term pressure is evident, there is the potential for a significant rebound if demand conditions improve as expected. As the market continues to grow, watching these demand indicators will be crucial to understanding Bitcoin’s future trajectory.
BTC Technical Details
Bitcoin is currently trading at $54,404, holding a critical support level that keeps its price in a reasonable accumulation pattern. This level is crucial to preventing further declines. If BTC fails to hold this support, a deeper correction could be on the horizon.
BTC is currently trading below the 4-hour 200-day moving average (MA) of $59,263. Reclaiming and holding this level as support is imperative to change market sentiment and revive bullish momentum. A decisive break above $60,000 would likely trigger renewed demand and potentially push the price higher.
Conversely, if Bitcoin loses its current support and falls below $54,404, it could signal a move towards lower demand zones, with $49,000 becoming a key target for further testing. This scenario would indicate a bearish turn in the market, which would require close monitoring of price movements to assess future trends. The possibility of a hold above $54,404 and reclaiming the 200 MA will be crucial in determining BTC’s short-term prospects and potential for a recovery.
Featured image is from Dall-E, chart is from TradingView
