Bitcoin Price Churn Enters ‘Final Phase’ Before Bull Run Continues: CryptoQuant

Bitcoin now has the “sustained demand” to break out of its months-long consolidation range, an analyst from CryptoQuant predicts.

After dipping below $50,000 earlier this month, the top digital currency has returned to its well-established price range between $57,000 and $68,000. In the aftermath, Bitcoin’s average daily token transfer volume rose from 650,000 BTC to 765,000 BTC.

According to verified CryptoQuant author Axel Adler Jr., most of this volume increase stemmed from “panic selling by holders.” Yet despite this, the Bitcoin market has been able to withstand that selling pressure without any significant declines.

“The observed increase in token transfer volume at the $57K level serves as an indicator of sustained demand for the coins,” Adler wrote in a research post on Tuesday. “This demand points to a bullish outlook among many market participants.”

By his analysis, Bitcoin’s price stability amid rising volume means that Bitcoin investors view the current range as an attractive purchase price, relative to the $73,000 all-time high reached in March. Having established a reliable floor, Adler predicts that Bitcoin is in its “final phase of market consolidation,” characterized by low volatility while the market agrees on Bitcoin’s value.

In a message to Decrypt, Adler clarified that he still sees a high probability of Bitcoin descending back to $50,000—albeit briefly.

“The price is influenced not only by spot market demand but also by liquidity in the futures market,” he explained. “It is evident that with a retest of the 50k level, Bitcoin will be bought up, as was the case on Black Monday at the beginning of August.”

Compared to 2021, Bitcoin’s daily token transfer volume remains extremely suppressed. After topping out close to 6 million in mid-2022, daily token activity has rarely surpassed 1 million coins since the start of 2023. That’s despite Bitcoin now trading at equal or higher prices compared to 2021 and 2022.

According to Adler, the difference lies in the quality of the investor. Nowadays, people see the yield that Bitcoin provides and are far less willing to part with the asset.

“We are now talking about a new influx of finance through TradeFi, where the yield demonstrated by BTC is considered very high,” he said. “Essentially, over the past five years, BTC has transformed from a marginal instrument into a professional investment product.”

Edited by Ryan Ozawa.