Analysts point to the market reset as a potential catalyst for Bitcoin’s next rally

On August 22, technical analyst and creator of the stock-to-flow model Willy Woo published a chart of Bitcoin inventory on exchanges.

He noted that things have been low until early August due to an influx of around 100,000 BTC from the German and US governments selling and distributions from Mt. enjoy

He added that “there has been speculation to create more paper BTC.” Paper Bitcoin refers to derivatives such as futures and options that do not involve direct ownership of the asset.

A healthy paper Bitcoin removal is needed

However, the market crash in early August removed much of that Bitcoin role and leverage that has kept markets depressed, he said before adding:

“This is a healthy open value reset (paper bets). It is very difficult for BTC to rise when there is overheated speculation in the market.

I’ve been on RnR for a while now, but…

Here’s my favorite chart to set the scene.

Less inventory = bullish

Until the beginning of August, we have been in a bearish position with an influx of 100,000 coins (Germany, MtGox, DOJ) while speculation has grown to create more paper BTC. pic.twitter.com/Yq7yhMpRZ8

— Willy Woo (@woonomic) August 21, 2024

Woo said that “BTC price action needs to get really dull” before adding: “I feel like we’re 66% of the way there” as much of the speculation is gone and more local BTC to be absorbed

On the supply and demand side, there has been a recovery from the near-term downside to “gently neutral,” he said before adding:

“But in the long run, the good news is that we’re not in a bear market. Just a very long consolidation.”

Meanwhile, fellow analyst Peter Brandt observed that the current bull market cycle will soon become the longest post-halving period in history for a new all-time high. He added that this could indicate that a new all-time high for this cycle may not necessarily be in the cards.

However, ITC founder Benjamin Cowed noted that Bitcoin is pretty much where it should be in terms of progression through the market cycle compared to previous ones.

despite everything #BTC it’s around where it always is at this point in the market cycle pic.twitter.com/zO52x9tAtX

— Benjamin Cowen (@intocryptoverse) August 21, 2024

BTC Price Outlook

Bitcoin prices hit a weekly high of $61,800 during late trading on August 21. However, the asset has dipped to just over $60,500 during the Asian trading session on Thursday morning.

Despite all the state selling and defunct exchanges, BTC has remained capped since recovering from its big dump earlier this month.

Analyst ‘Rekt Capital’ said BTC would need to break the $61,420 resistance this week to count as a new uptrend.

#BTC

Once Bitcoin has consolidated at the bottom of the channel…

The uptrend through the Channel to the top would probably take 2-3 weeks

Convincingly break ~$61420 soon and this week will technically count as week 1 in this new uptrend$BTC #Crypto #Bitcoin https://t.co/0Oj3OcJBf4 pic.twitter.com/5wnFbgN5cQ

— Rekt Capital (@rektcapital) August 21, 2024

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