Bitcoin isn’t prone to enter a downtrend anytime quickly, with sturdy fundamentals supporting its present trajectory, says a researcher at crypto product supplier 21Shares.
“The structural imbalance between surging demand and a quickly vanishing provide base makes a protracted correction more and more unlikely,” 21Shares crypto analysis strategist Matt Mena advised Cointelegraph.
“There are way more positives than negatives proper now,” Mena added.
Change, OTC Bitcoin provide at all-time lows
Mena mentioned that the Bitcoin (BTC) provide held on crypto exchanges and over-the-counter (OTC) desks continues to remain at an all-time low whereas demand for the cryptocurrency continues to rise.
”On the provision facet, the basics stay much more skewed,” he mentioned.
Bitcoin reached a brand new all-time excessive of $122,884 on Monday, and Bitfinex mentioned that new patrons getting into the Bitcoin market are seen as price-agnostic and are scooping up the cryptocurrency sooner than miners can provide it.
Bitwise head of analysis André Dragosch identified on Friday that the shortage of Google search curiosity for the time period “Bitcoin” may point out an absence of curiosity by retail traders.
“Bitcoin is at new all-time highs, however retail is nearly nowhere to be discovered,” Dragosch mentioned.
Bitcoin’s new excessive of $122,884 got here simply days after it broke its all-time excessive of $111,970 on July 9, earlier than getting into an uptrend that prolonged into the weekend.
Bitcoin is buying and selling at $117,804 on the time of publication, in line with CoinMarketCap information.
Mena mentioned that within the first half of this yr, “US-listed Bitcoin ETFs have already absorbed a number of multiples of the BTC that shall be mined this yr.”
“That doesn’t even embrace company treasury patrons, who proceed so as to add quietly within the background,” he added.
Macro dangers may jeopardize Bitcoin uptrend
Nonetheless, Mena cautioned {that a} reversal can’t be dominated out totally.
“It’s actually potential that Bitcoin consolidates, and even sees a pullback,” he mentioned, flagging two macro dangers that would weigh on the crypto market:
“If Trump’s proposed tariffs find yourself being extra extreme than markets at the moment anticipate, or if Powell alerts that charge cuts are additional off than anticipated, we may see threat belongings broadly reprice decrease, together with Bitcoin.”
21Shares forecasts that an prolonged worth drawdown over the subsequent six months unlikely “is unlikely,” Mena mentioned.
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“As soon as summer season ends and liquidity returns, we count on upside momentum to renew,” he added.
“What’s actually exceptional is that Bitcoin is setting new all-time highs throughout essentially the most illiquid, seasonally weak a part of the yr,” Mena mentioned.
Traditionally, the third quarter of the yr has been Bitcoin’s weakest-performing quarter, averaging only a 6.32% return since 2013, in line with CoinGlass information.
“Traditionally, summer season is when markets stagnate — merchants are on vacation, quantity dries up, and worth motion flattens,” Mena mentioned. “However this cycle is defying that norm.”
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This text doesn’t comprise funding recommendation or suggestions. Each funding and buying and selling transfer entails threat, and readers ought to conduct their very own analysis when making a call.
