Bitcoin Price Analysis: How Bull Flag Defends $1 Trillion Market Cap for BTC

Sahil Mahadik
Updated
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Bitcoin Price Analysis

Highlights

  • The Bitcoin fear and greed index at 26% indicates a positive outlook from market participants for the near future.
  • The formation flag pattern hints the asset is under a temporary pullback to build bullish momentum for higher rallies.
  • The intraday trading volume in Bitcoin is $31.09 Billion, indicating a 40% loss.

Bitcoin Price Analysis: The cryptocurrency market extended its correction trend for the first of July as Bitcoin witnessed a massive outflow. Amid the liquidation of the fallen Mt. Gox exchange, the US and German governments, the BTC price fell to a 4-month low of $53,500 on Friday. While the weekends are mostly stable for digital assets, the aforementioned entities could offload more BTC this month, creating a concern of further downfall.

Also Read: Bitcoin Selling Pressure Also Fueled By 9,301 BTC From 2 Whales

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Bitcoin Price Analysis: Large BTC Holders Accumulate Amidst Volatility

BITSTAMP:BTCUSD Chart
Bitcoin Price Analysis| Tradingview

Analyzing the daily charts shows that Bitcoin showcased an aggressive downfall since June start and its price reverted to $72000, The bearish turnaround initiative led by BTC miners’ capitulation and ETFs outflow is now carried by heavy liquidation from Mt. Gox exchange, the German Government, and the US Government. 

Thus, Bitcoin recorded a monthly loss of 25.5% to hit $53500, while the market cap plunged to a low of $1.06 Trillion on Friday. However, the supply pressure eased as the weekend approached and reverted the coin price to $56739.

Interestingly, the reversal formed precisely at the support trend of a bull flag. This continuation pattern has been driving the past 4-months’ consolidation in BTC between the two downsloping trendlines. 

Until the lower trendline is intact, the pioneer cryptocurrency is prevented from a major correction, thus maintaining its market cap above $1 Trillion.

Also Read: Just-In: German Govt Moves 500 Bitcoin, Another BTC Dump Imminent?

Moreover, recent analytics from Santiment shows that wallets holding over 10,000 Bitcoin have significantly benefited from the recent six-week volatility in the cryptocurrency market. These large holders, believed to be primarily exchange liquidity providers, have accumulated an additional 212,450 BTC during this period, now owning 1.05% of the total Bitcoin supply.

This surge in accumulation marks the highest level of holdings in nearly six years. The last time wallets with 10K+ BTC exceeded 3.19 million coins was in November 2018. The current trend indicates strong confidence among these large holders, which could be a bullish signal for the cryptocurrency’s future performance.

Furthermore, the ongoing consolidation is above the 23.6% Fibonacci retracement level indicating the broader trend remains bullish.

Thus if the flag pattern holds true, the Bitcoin price could rebound 23% to rechallenge the flag resistance around $70000. A successful breakout from the overhead is crucial to reentering a bullish trend.

The aforementioned upswing will be invalidated if sellers breach the bottom support trendline.

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Technical Indicator 

  • BB Indicator: The BTC price challenging the lower boundary of the BB indicator highlights the sellers are still aggressive towards this asset.
  • RSI: The Relative strength index below the oversold region (below 30%) after August 23’ could attract fresh buying pressure.
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Frequently Asked Questions (FAQs)

1. What is miner capitulation and how does it affect Bitcoin prices?

Miner capitulation occurs when Bitcoin miners sell off large amounts of their BTC holdings, often due to unprofitable mining operations.

2. What is a bull flag pattern in technical analysis?

A bull flag pattern is a continuation pattern that appears during an uptrend, characterized by a sharp price rise followed by a consolidation period in the shape of a downward-sloping rectangle.

3. What is the significance of the Fibonacci retracement level?

Fibonacci retracement levels are horizontal lines that indicate potential support and resistance levels where the price could reverse direction
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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Armed with a strong grasp of technical analysis, he keeps a vigilant eye on the daily price movements of top assets and indices. Drawn by his fascination with financial instruments, Sahil enthusiastically embraced the emerging realm of cryptocurrency, where he continues to explore opportunities driven by his passion for trading
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.