Bitcoin (BTC) price rose above $65,000 on May 6 as analysts argued that the post-halving “danger zone” is over and there could be more upside for BTC.
Bitcoin out of “danger zone” after halving – analyst
Bitcoin’s post-halving danger zone is the three-week period following the halving, which has historically been associated with bearish volatility occurring below the re-accumulation range.
The post-halving danger zone may be over as Bitcoin rises above its current re-accumulation range of around $60,000, according to prominent cryptocurrency analyst Rekt Capital. He wrote in a May 6 post:
“Temporally, the post-halving ‘danger zone’ will continue for the remainder of this week, which could see us enter the third and final week of this halving period. However, in terms of price, the expected effect has already been achieved.”
During the 2016 bull cycle, Bitcoin produced an 11% decline 21 days after the halving, signaling the beginning of a price reversal. famous Rekt Capital from May 6th post:
“In this cycle, history repeated itself as Bitcoin created a -6% downward wick from its lowest range in the 15 days following the halving. Afterwards, Bitcoin rebounded strongly… Bitcoin Halving ‘Danger Zone’ Is Over.”
Meanwhile, Bitcoin analyst Willy Woo predicts that BTC prices will rise based on the volume weighted average price (VWAP), a popular oscillator used by traders to determine average asset prices based on price action and volume. I expect it to be.
right wrote From the May 6 X post:
“It seems like a good setup for BTC to reach escape velocity. Bull divergence with lots of room to run.”
Further demonstrating the shift in investor sentiment, the Cryptocurrency Fear and Greed Index rose to 71/100, indicating “greed,” up from 43/100, or “fear,” on May 2.
Is the sell-off for long-term Bitcoin holders over?
Funds outflow from 11 U.S. spot Bitcoin exchange-traded funds (ETFs) contributed to the Bitcoin adjustment. US ETFs recorded their highest week of outflows since launch, with net cumulative outflows of nearly $900 million last week, according to Dune data.
Related: Bitcoin enters a ‘new era’ as whales secure more than 47,000 BTC during the price drop.
Interestingly, the data shows that one Long Term Holder (LTH) priced at $70,000 sold to a new investor. Therefore, a new active accumulation phase may occur. startAccording to a May 6 X post by CryptoQuant author Axel Adler Jr.
This could significantly reduce selling pressure on Bitcoin, paving the way for a gradual rise to new highs, according to Eitan Katz, founder of Kima, a decentralized money transfer protocol. Katz told Cointelegraph:
“The completion of distributions by long-term holders in the $70,000 range may actually relieve some of the selling pressure in the market. This scenario could contribute to a more stable environment and provide a clearer growth path for new investors.”
However, according to Mithil Thakore, CEO of Velar, a Bitcoin-based liquidity protocol, Bitcoin may remain depressed in the near term due to inflation concerns and weakening interest rate cut expectations. Thakore told Cointelegraph:
“The market environment became more complex last week with the Federal Reserve’s decision to keep interest rates at their highest level in 20 years, signaling the possibility of further cuts. “Considering these factors, it is possible for the economy to remain strong in the short term below the previous all-time high,” he said.
After the current short-term consolidation, Thakore expects the Bitcoin price to reach $100,000 before the end of 2024. He said:
“There is a promise for Bitcoin in late 2024. Expected interest rate cuts, new demand from ETFs, and advancements in Bitcoin Layer 2 solutions could fuel a resurgence, potentially pushing Bitcoin to new all-time highs and the coveted milestone of $100,000.”
Related: ‘Seed. 100’ buys Bitcoin dip for first time since halving. Is BTC at the bottom?
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.