Bitcoin has been dealing with a lot of uncertainty over the past few months in spite of the gains it made at the beginning of the year. Recently, the German government has made the news in the crypto community after emptying its digital wallet on July 12th. The final transaction amounted to no fewer than 3,846 BTC, valued at roughly $62,604 per coin. The government-owned approximately $2 billion in Bitcoin, and the steady selling of such a large quantity of assets caused obvious changes in the trading environment, namely by increasing selling pressure. The mounting sales are not the only cause for concern, as BTC has seen its prices dropping quite severely at the same time. However, the Q4 of 2024 has renewed hope that things will improve soon and that a rally is on the way.
However, some investors have seen this as an opportunity to capitalize on the Bitcoin price and consolidate their portfolios. Buying low and selling high is the standard approach in the marketplace, and savvy investors know that they should take advantage of price drops. But what do these trends have to do with Bitcoin’s future, and what can investors expect from the asset over the next few months?
Price Bottom
Many analysts and investors predict that the BTC price may have already reached its bottom due to the German government selling en masse to the point that its account balance became zero. At the moment, some technical indicators actually appear to indicate that the coin is on the brink of starting a re-accumulation phase. And while reaching the price bottom is definitely a positive indicator in that regard, as it signifies that a rally is in the making, Bitcoin still needs to consolidate its support levels even further.
In November, the price was over $98K, showing strong performance and surpassing its previous all-time high levels of 2021 and March 2024. The new all-time high sees Bitcoin breaking its own records and climbing higher than ever before, with the halving and the recent political and economic changes being the main reason for the growth.
Volatility
Price volatility and fluctuations are expected in the crypto environment, including Bitcoin’s. Although the asset has been around for a considerable amount of time, it remains changeable, with prices shifting all of a sudden due to several different factors. As prices are still consolidating and finding the area where they feel comfortable, there’s a lot that could still change. While there’s no denying the fact that BTC is definitely more potent than it has been during the past couple of years, it is not yet as confident as it could be.
The current market conditions are typically associated with price difficulties, so make sure your trading strategy considers the possibility of price changes. This way, you guarantee that there’s no risk of incurring more losses than gains and putting your portfolio in jeopardy.
The Rally
Most investors weren’t shocked by the arrival of the current rally due to their previous market analyses and the observance of several different metrics. Earlier this year, indicators had moved from the capitulation phase to buying for the first time, and such a movement was impossible to go unobserved by the trading community. Miners are finally exiting the capitulation period, and the price is finally taking its first tentative steps into buy territory. The indicator used to come up with these figures is the hash ribbons one, a tool that focuses on BTC trading.
This metric reveals the estimated processing power miners use in the network by combining the 30-day moving average with the 60-day one. When there’s a downward cross of the short-term moving average over the long-term one, you can be confident that a capitulation period is due to arrive. An upward cross naturally signifies the opposite thing, indicating the end of such a trend. As the 30-day moving average goes below the 60-day equivalent, miners begin struggling, but when the 60-day moving average comes on top, a reliable buy signal is generated.
On July 23rd, the market left the capitulation period for the first time in two months. However, the price action has nonetheless found itself in a state of flux as part of a lower time frame after the market recovery action lifted the price above $68,000.
Enduring sell-side concerns remain an issue, as they’re a result of the ongoing repayment action started by a now-defunct exchange that ceased all operations in 2014 amid revelations that it had lost or stolen a huge amount of cryptocurrencies.
Mainnet
BitcoinOS, the BTC-based roll-up protocol, has succeeded in verifying the first ZK-proof located on the system’s mainnet. Known colloquially as ZKP, this cryptographic method allows the prover to demonstrate to the verifier that a certain statement is true even without revealing specific information about the statement. This procedure is made possible by the use of a secret key that is set in place before the transaction can even take place. The arrival of this functionality on the Bitcoin blockchain means it is possible to unlock several functionality levels and bring scalability to the BTC mainnet without further changes to the system’s base layer.
According to some developers and researchers, this change also marks the beginning of a new era in which Bitcoin moves away from its single-use as a digital gold in order to achieve new milestones. Now, it will be able to act as a decentralized operating system where applications can be built and launched. As such, altcoin platforms are no longer safe from the competitive levels Bitcoin can bring to the table and will have to develop new functionality to guarantee a profitable future.
Bitcoin is the largest cryptocurrency in the world, with the most extensive market cap level and high engagement rates from investors. However, to guarantee that your transactions remain profitable, you must still create a comprehensive game plan that will let you boost your earnings.
