Bitcoin Consolidates Above $107K as Analysts Warn of Momentum Fade Amid ETF Optimism
Bitcoin is staying above $107,000, but it has dropped more than 1% in the last 24 hours. Analysts say that the world's largest crypto by
Quick overview
- Bitcoin is currently above $107,000 but has seen a decline of over 1% in the last 24 hours, indicating a transition phase.
- Despite a slowdown in momentum, institutional demand remains strong with significant inflows into US-based spot Bitcoin ETFs.
- Multiple factors, including inflation concerns and potential inclusion of MicroStrategy in the S&P 500, could drive Bitcoin towards a breakout above $110,000.
- Long-term holders selling their assets have contributed to a supply overhang, preventing Bitcoin from maintaining prices above $100,000.
Bitcoin BTC/USD is staying above $107,000, but it has dropped more than 1% in the last 24 hours. Analysts say that the world’s largest cryptocurrency is going through a very important transition phase. After an amazing three-month rally that saw BTC rise almost 41% from its April low of $73,273, momentum indicators are starting to show symptoms of weariness.
BTC/USD Technical Analysis Points to Consolidation Phase
Bitfinex analysts said that Bitcoin’s “vertical acceleration” seems to be off the table for now. This is because the spot volume is going down and the taker buy pressure is getting weaker, which suggests that the market may be near a local peak. For six days in a row, the cryptocurrency has been trading in a very small range, with daily price changes staying below 3%. This low degree of volatility has led to speculation about a breakout happening soon.
Technical indications show a variety of things. Bitcoin is now trading below the $107,500 mark and the 100-hour simple moving average. The next level of resistance is at $107,400. Technical analysis reveals that the hourly chart shows a bearish trend line, but the monthly structure as a whole is still positive.
$106,800 and $106,500 are important support levels, and $105,500 is the most important support level. If the price breaks above $108,000, it might advance toward $108,800. If momentum picks up again, the final target of $110,000 will be into view.
Institutional Demand Remains Strong Despite Profit-Taking
Even though the trend is slowing down, institutional demand is still supporting the market. Since June 9, US-based spot Bitcoin ETFs have had 14 days in a row of inflows, bringing their total net inflows to $4.63 billion as of June 27. Economist Timothy Peterson called the latest $2.2 billion weekly inflows “huge” and thinks there is a 70% chance that they will keep coming in.
Profit-taking activity, especially among short-term holders who bought in below $80,000, is countering this institutional buying pressure. According to CryptoQuant, Bitcoin’s short-term holder Net Position Realized Cap has gone from negative $49 billion to over $5 billion. This usually means that ordinary investors are getting more interested in Bitcoin, which has happened before market crashes or periods of consolidation.
Multiple Catalysts Align for Potential $110K Breakout
There are a number of things that could cause Bitcoin to go up again. People are starting to worry about inflation again. The tariffs on imports that went into effect in April are slowly being passed on to consumers. The US Personal Consumption Expenditures Price Index held below 2.3% from March to May. As supply chains respond to increasing costs, it may start to rise.
Also, the fact that MicroStrategy (MSTR) could be added to the S&P 500 index is another reason to be bullish. Joe Burnett from Semler Scientific says that this kind of inclusion could cause “a tsunami of passive capital” to chase after Bitcoin.
Market strategist Daan Crypto Trades says that historical seasonal patterns favor July performance. Over the previous twelve years, Bitcoin has had an average return of 7.56% in July, whereas June’s performance has been mostly flat.
Federal Reserve Decision Looms Large
The Federal Reserve’s decision on interest rates on July 30 is a major macroeconomic event. The market is only pricing in a 19% chance of a rate decrease right now, so any dovish surprise may give Bitcoin a big boost, since lower rates are usually good for the cryptocurrency.
Donald Trump’s proposed Senate package, which promises big tax cuts on tips, overtime, and Social Security income, might also change how the market works by making consumers more liquid. However, analysts caution that this could lead to fiscal imbalances.
Long-Term Holders Key to Sustained Rally
Charles Edwards, the founder of Capriole Investments, says that the main reason Bitcoin hasn’t been able to stay above $100,000 for a long time is because long-term holders are selling. He says that Bitcoin veterans have been “dumping on Wall Street” since spot Bitcoin ETFs came out in January 2024. This has created a supply overhang that has stopped prices from rising, even if there is institutional demand.
Bitcoin Price Prediction and Outlook
If a few things happen, including as continuing ETF inflows, less selling pressure from long-term holders, and good macro conditions like possible Fed rate reduction, Bitcoin might break out above $110,000.
Near-term price targets include:
- Immediate resistance: $107,400-$108,000
- Bullish breakout target: $108,800-$110,000
- Downside support: $106,500-$105,500
But history shows that the months of August and September are times to be careful because they tend to be more volatile and have corrections before the usual year-end rise.
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