Bitcoin Price Swings After Weekend Bloodbath, Analysts Divided on Future

Bitcoin (BTC) and other major cryptocurrencies are currently experiencing a period of consolidation following a brutal weekend sell-off. Billions of dollars in leveraged positions were liquidated, pushing prices down to multi-week lows.

Bitcoin’s Potential Rebound on Horizon?

One analyst, known as CryptoMichNL on social media, believes a market rebound is imminent. They point to the upcoming Federal Open Market Committee (FOMC) meeting in September, where the US Federal Reserve is expected to cut interest rates. This, combined with a potential Treasury Buyback program, could inject significant liquidity into the global economy, historically a positive influence on Bitcoin prices.

Institutional Confidence Remains High

Despite the recent volatility, some institutions remain confident in Bitcoin’s long-term prospects. Semler Scientific recently followed in the footsteps of MicroStrategy by purchasing $6 million worth of Bitcoin, adding to their existing holdings.

Volatility Still a Concern

However, caution is advised. Bitcoin’s volatility index reached its highest level in 20 months in early August, indicating heightened anxiety among traders. Additionally, the put-to-call ratio for Bitcoin options suggests a bearish sentiment, with traders favoring puts (sell options) over calls (buy options).

Analyst Opinions Diverge

Analysts are divided on Bitcoin’s near-term future. Some, like pseudonymous trader RektProof, anticipate sideways price action, while others, like Bitgrow Lab founder Vivek Sen, predict a near-term recovery.

Bullish Signs Emerge

On-chain data suggests potential accumulation by “permanent holder addresses,” which have amassed nearly $23 billion worth of Bitcoin in the past month. CryptoQuant CEO Ki Young Ju believes this indicates institutional or high net worth individual investment and predicts future announcements of large-scale Bitcoin purchases. He also highlights the near-end of miner capitulation and a potential return of retail investors as positive signs.

BTC/USD Technical Analysis

Bitcoin’s price currently sits around $57,000, facing resistance near $58,000. A clear break above this level could signal a bullish continuation towards $60,000 or higher. However, failure to overcome this resistance could lead to another decline, with initial support at $56,000.