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Is the Worst Behind Bitcoin (BTC) Following Monday’s Price Drop?

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“Black Monday.” That is what the broader market termed Bitcoin’s (BTC) price correction from $58,000 to $49,000 on August 5. For experienced players who have seen the bull and bear of different cycles, that incident was not surprising.

While the event caused a plethora of large-scale liquidations, participants may wonder whether that was the worst one-day correction. This on-chain analysis gives more context to this thought.

Bitcoin Not Overvalued Yet, Future Gains Possible

To answer this question, BeInCrypto looks at key metrics that have repeatedly been recognized as crucial to BTC. One of them is the Market Value to Realized Value (MVRV) ratio. The MVRV ratio offers insights into the profitability of the market.

A spike in the ratio suggests that Bitcoin holders have a good level of unrealized gains, suggesting a higher probability of selling. However, when the ratio decreases, profits reduce, and holders have a lower chance of selling. 

Historically, this metric also tells when Bitcoin is undervalued, overvalued, and close to the peak of the cycle. At press time, data from IntoTheBlock shows that the MVRV Ratio is 1.76.

Bitcoin Market Value to Realized Value Ratio
Bitcoin Market Value to Realized Value Ratio. Source: IntoTheBlock

In past cycles, the ratio reached a higher reading than the bull market can be termed “over.”. However, despite BTC’s impressive price performance at some point, the metric shows that the price has not reached its peak.

Putting it into context, Juan Pellicer, Senior Researcher at IntoTheBlock, explained that BTC, like other cryptocurrencies, is yet to reach an overvalued point. 

“Most assets have yet to approach their historic overvaluation ranges. For example, Bitcoin’s highest MVRV this year peaked at around 2.64, whereas in the previous cycle, it reached as high as 3.68. For many altcoins, the difference is even larger.” Pellicer told BeInCrypto

Based on this comment and the historical analysis above, BTC’s recent decline is likely a discount. At press time, the coin trades at $57,255. This price means that it is still 22.37% down from the all-time high (ATH) it reached in March.

Retail Investors Hesitant, But There’s a Way Out

It is worth noting that institutional investors were the main driver of the rally to a new ATH through the Bitcoin ETFs. It is also important to mention that once the ETF netflow began to dry up, BTC price faced a notable decline.

In fact, amid the flash crash on August 5, netflows of the ETFs were negative. However, recent data shows that this may no longer be the case. This is because of the $45 million total daily netflow recorded on August 7. 

When compared to previous net positive flows, this is a low figure. At the same time, it could serve as the beginning of Bitcoin’s price stability, provided it is sustained.

Read More: What Is a Bitcoin ETF?

Bitcoin ETFs Netflows
Bitcoin ETFs Netflows. Source: SoSo Value

Should this be the case, this worst could be over for BTC, and the price may not drop below $50,000 again for a while.

Furthermore, Bitcoin’s potential does not lie solely in the capital these institutions have. Recall that, in previous bull markets, the coin did not have this kind of institutional adoption.

However, the coin has not experienced anything close to the kind of retail participation it had in the 2017 and 2021 market boom. During our conversation, Pellicer also weighed in on this, saying that:

“The number of active addresses on Bitcoin has been trending down since November 2023. This is typically a bearish sign for the entire market, as new participants in the Bitcoin market can serve as a proxy for new entrants to the industry.”

On several occasions, BeInCrypto noticed that a good level of retail interaction with BTC begins when the number of active addresses is over one million. But, according to Santiment, the metric has struggled to reach this region since March. 

Bitcoin Active Addresses
Bitcoin Active Addresses. Source: Santiment

However, on-chain shows an uptick in active addresses as it notched 717,000 at press time. If this metric continues to jump, then BTC’s price may slowly move upwards, erasing the chunk of losses it has had in recent times.

BTC Price Prediction: Bulls Want $60,000 First

From a technical perspective, Bitcoin may not experience such a massive price drop in the short term. This is because of the signals shown by the Balance of Power (BoP), a technical tool used to measure the strength of buying and selling in the market.

If it is negative, it means selling pressure is intense. However, at press time, it is positive, indicating that market participants are buying the coin. If this continues, BTC may note an uptick that may cost close to $60,000.

Additionally, the Bollinger Bands (BB) provide insight into the volatility around the coin. In simple terms, the BB shows how rapid price fluctuations may occur and tells if a coin is overbought or oversold.

When the indicator’s upper band hits the price, it is overbought. But when it touches the lower band, it is oversold. The image below shows that BTC was oversold on August 7, when the price was $54,594.

Read More: Bitcoin Halving History: Everything You Need To Know

Bitcoin Daily Analysis
Bitcoin Daily Analysis. Source: TradingView

The expanding bands, coupled with the recent buying pressure, suggest that the coin could continue to undergo a rebound. If this is the case, BTC may hit $60,534 in the short term. On a mid to long-term horizon,  the price could reach $71,996.

However, in a worst-case scenario, accompanied by intense selling pressure, BTC may drop to $54,482.

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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Trump and Lummis Unite on $76 Billion National Bitcoin Reserve

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Senator Cynthia Lummis is making a bold new proposal to establish a Bitcoin reserve in the US. This follows President-elect Donald Trump’s recent declarations in the run-up to the US elections.

Her bill, the BITCOIN Act of 2024, aims to have the US Treasury acquire 1 million Bitcoin (BTC) over five years, a massive move that would position the US as a leader in financial innovation.

Senator Cynthia Lummis Advocates Bitcoin Reserve

The Wyoming senator wants the plan spread across five years, with purchases of 200,000 BTC tokens every year to develop America’s Bitcoin reserve. At current rates, that translates to an investment of about $76 billion.

“We are going to build a strategic Bitcoin reserve,” Lummis shared on X (formerly Twitter).

Notably, Lummis’s side of the political divide now holds the majority in both the Senate and House committees. According to Stand With Crypto, 261 pro-crypto candidates have been elected to the House of Representatives against 116 anti-crypto candidates. On the other hand, there are 17 pro-crypto candidates in the Senate and 12 anti-crypto lawmakers.

Read more: How To Buy Bitcoin (BTC) and Everything You Need To Know

BTC Price Performance
BTC Price Performance. Source: BeInCrypto

With this, the chances of Senator Lummis’ Bitcoin Bill passing through Congress are far better. This is as opposed to the Biden administration, where efforts toward bipartisan bills were greatly stifled due to a divided Congress. 

This political alignment, along with Bitcoin’s recent surge to a new all-time high, adds momentum to Lummis’ initiative. Industry leaders, including Michael Saylor of MicroStrategy and Samson Mow, have shown support, stressing Bitcoin’s potential as a national asset.

Mow highlighted Bitcoin’s value at sub-$100,000, pointing out its potential strategic importance if prices soar above $500,000 in coming years.

“Good luck Senator Lummis. I suggest acting quickly. The difference between acquiring Bitcoin below $0.1 million vs. $0.5 million will have massive geopolitical ramifications,” Mow wrote.

Framework for Secure BTC Management

The BITCOIN Act does not stop at Bitcoin acquisition. It also introduces a framework for managing Bitcoin securely within Treasury vaults. It aims to reduce national debt by half by 2045. This would serve as a hedge against inflation and a potential powerhouse for US debt management.

President-elect Trump publicly endorsed the creation of a national Bitcoin reserve during the Bitcoin 2024 conference in Nashville. His remarks continue to stir interest among crypto proponents and Republicans as the then-presidential aspirant emphasized Bitcoin as a “core of financial independence” for the US.

 “It will be the policy of my administration…to keep 100% of all the Bitcoin the US government currently holds or acquires into the future. This will serve in effect as the core of the strategic national bitcoin stockpile…It’s been taken away from you,” Trump said.

Meanwhile, state governments are also eyeing Bitcoin, with Florida’s Chief Financial Officer Jimmy Patronis recently endorsing Bitcoin as a “strategic reserve” for state pensions. Florida’s pension fund, among other states like Wisconsin and Michigan, would benefit from Bitcoin’s long-term appreciation, diversifying investments amid economic uncertainty.

Nevertheless, while the plan has garnered support, it raises questions about economic risks and global impacts. Some economists warn of potential volatility in tying national debt management to cryptocurrency. However, advocates point to Bitcoin’s finite supply and growing international adoption as a hedge against inflation and market fluctuations.

Read more: Crypto Regulation: What Are the Benefits and Drawbacks?

With Trump’s support, a Republican-led Congress, and growing state-level backing, the plan has momentum. This makes the concept of a national Bitcoin reserve a closer reality than ever before. If implemented, the BITCOIN Act could place the US at the forefront of a global financial evolution.

“Other countries will follow,” another popular user on X added.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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Bitcoin Price Might Never Dip Below $70,000 Again After The US Elections, Here’s Why

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The US presidential elections have come and gone, and the only thing left is the results. Interestingly, a snapshot of the Bitcoin price during the elections showed Bitcoin trading just above $70,000. This is a notable price to follow, as history shows this might be the price support for Bitcoin in the foreseeable future. Interestingly, this phenomenon goes back to the Bitcoin price levels in previous US elections.

Why Bitcoin Price Might Never Dip Below $70,000 Again

Bitcoin has largely been on an uptrend since Monday, when it kicked off a run after it rebounded to the upside from $67,000. This run continued, allowing the Bitcoin average price during the 2024 presidential elections to be around $70,110. 

Historically, U.S. election cycles have often been accompanied by shifts in Bitcoin’s value, marking crucial price points that tend to establish longer-term support levels. 

To understand this trend, we need to look at the past four election cycles. Back in 2012, during the early days of the crypto industry, the Bitcoin price traded at a modest $10 on the US presidential election day, a price point that now seems almost unimaginable. By 2016, Bitcoin’s election-day price had climbed to $710, setting a new baseline that it has never revisited since.

The most interesting one was what happened after the 2020 US presidential election, when the Bitcoin price was trading around $13,555. The Bitcoin price has never revisited this price point again since then up until the time of writing. What’s more interesting is that this price point even served as the lowest support level during the 2022 bear market price crash. 

If these historical trends are any indication, the 2024 election-day price of $70,110 could become a similar stronghold and a price floor for Bitcoin in the coming years.  This level might even serve as critical support should a bear market eventually take hold at any point.

Bitcoin price
Source: X

What’s Next For The Bitcoin Price?

As of now, Bitcoin is trading above $73,200 after experiencing an intense surge over the past 24 hours. This remarkable rally saw Bitcoin climb nearly 10% within a single day, reaching an intraday high of $75,358. This milestone has now become Bitcoin’s highest trading level, as it broke past its previous all-time high of $73,737 in March 2024.

Although the Bitcoin price has pulled back slightly likely due to some investors cashing in on recent profits, the rally is expected to resume anytime from now. Considering this momentum, Bitcoin remains well-positioned to challenge the $80,000 mark before the end of November, especially if buying interest continues to drive the current uptrend.

Bitcoin price chart from Tradingview.com
BTC price above $74,000 | Source: BTCUSD on Tradingview.com

Featured image created with Dall.E, chart from Tradingview.com



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Bitcoin Price After US Presidential Elections: Here’s How BTC Reacted To Previous Winners

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Market analysts have continued to deliberate on how the Bitcoin price could react to a Donald Trump or Kamala Harris victory in the US presidential elections. History indicates that Bitcoin’s future trajectory is bullish, irrespective of who wins the elections. 

How The Bitcoin Price Has Reacted To Previous Winners

The Bitcoin price has always hit a new all-time high (ATH) regardless of the winners in the past US presidential elections. In 2012, after Barack Obama won the elections, Bitcoin rallied and reached a new ATH of $1,200 in 2013. Its price then consolidated until the next election in 2016. 

Bitcoin price 1
Source: X

The 2016 US presidential elections, which Donald Trump won, also sparked the beginning of another impressive rally for the Bitcoin price, which rose to a new ATH of $19,000 the following year. In 2020, following Joe Biden’s victory in the US presidential election, BTC rose to a new ATH of $69,000. 

The Bitcoin price rally after the US presidential elections is believed to be due to the market certainty that the election aftermath provides. Meanwhile, based on history, the BTC rally could begin as soon as December, with the flagship crypto hitting a new ATH as soon as January 2024. 

In 2016, the Bitcoin price rally began about three weeks before the election and went on to hit a new high in the first week of January 2017. In 2020, BTC had also consolidated for about six months before it began to rally from $11,000 just about three weeks before the US elections and then went on to reach a new high of $42,000 in January 2021.

Bitcoin’s recent price action also looks to be playing out the same way as BTC began rallying in mid-October and even came close to hitting its current ATH of $73,700 late last month. As such, there is the possibility that the flagship crypto could again retest this ATH and surpass it as soon as January 2024 or even before then. 

There Could Be Some Volatility In The Coming Days

In an X post, Crypto analyst Ali Martinez warned that the days following the last three US presidential elections have been volatile for the Bitcoin price. However, he added that the overall trend has stayed upward. 

Bitcoin price 2
Source: X

Economist and crypto analyst Alex Krüger also warned about the potential pullback the Bitcoin price could face after the US elections. He claimed that there is a 45% chance that BTC could drop to as low as $65,000 if Kamala Harris wins the elections. 

Due to his pro-crypto stance, Donald Trump looks to be the most preferred candidate in the crypto community. As such, the market could initially react negatively to a Harris win while taking in Trump’s loss. 

At the time of writing, the Bitcoin price is trading at around $68,000, down in the last 24 hours, according to data from CoinMarketCap. 

Bitcoin price chart from Tradingview.com
BTC price pushes above $68,000 again | Source: BTCUSD on Tradingview.com

Featured image created with Dall.E, chart from Tradingview.com



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