Bitcoin quotes have stabilized after a strong drawdown in early August and are now in a flat trend with boundaries at levels of 56000 and 62000. While gold and stock markets have already offset the decline of the previous weeks, the main cryptocurrency is in no hurry to return to summer highs. Nevertheless, such a divergence in quotes dynamics is unlikely to last, traders will definitely take notice of the underperforming assets.
Analysts polled by Bloomberg attribute bitcoin's local weakness to expectations of the market's supply growth. The US government accounts for about $12 billion worth of confiscated cryptocurrency, and last week, 5% of that amount was transferred to the exchange managed by Coinbase Global. The US authorities are probably going to sell the bitcoins and other coins, which may pressure their quotes.
Khushboo Khullar from Lightning Ventures noted traders' concerns about these sales. In this regard, cryptocurrency market participants took a wait-and-see attitude. This is especially apparent when considering fixed-term contracts, the value of which has dropped to its lowest since 2022 when compared to the cryptocurrency quotes. However, Khullar believes this situation is temporary and expects bitcoin purchases to increase in the near future.
Meanwhile, Bitcoin Magazine Pro experts presented statistics on trading of the main cryptocurrency by long-term investors. According to their estimates, about 75% of bitcoin holders did not make any transactions with bitcoin in the last 6 months. As a result, the cryptocurrency supply on exchanges is reduced, and in conditions of growing demand, it can cause a sharp rise in quotes. The data also indicates that long-term investors are confident in bitcoin's favorable prospects, despite the recent drop in its quotes.
The RSI indicator on the daily bitcoin chart suggests a high probability of the further quotes growth. After breaking the level of 62000, the bulls are expected to pick up the pace, and their next target will be the level of 63500. Further, it will open the way to the July highs.
The following trading strategy can be suggested:
Buy BTCUSD at the current quotes. Take profit 1 – 62000. Take profit 2 – 63500. Stop loss – 57500.
This content is for informational purposes only and is not intended to be investing advice.
