Bitcoin sustained a more than 6% decline over the past week. The back-to-back corrections temporarily pushed the asset below $60,000.
Although it has rebounded since then, its recovery appears to have stalled around $61,500, causing concern among investors about further losses. This is especially true as the US government transferred 3,940 BTC to Coinbase Prime after receiving approval to liquidate.
However, QCP Capital believes that bitcoin will be able to defend the $60,000 support.
Bitcoin’s $60K Defense
On June 26th, the US government transferred 3,940 BTC to Coinbase Prime, the institutional trading arm of Coinbase. These tokens were initially seized from a convicted drug trafficker, Basmeet Singh, earlier this year.
This transfer has sparked concerns that the government might sell a portion of its BTC reserves, potentially leading to downward pressure on the asset’s price, which has already been struggling.
According to the latest analysis shared by QCP Capital, bitcoin has been effectively maintaining the $60,000 support level despite severe bearish pressures. It will be able to defend this level for two main reasons.
Firstly, a wallet identified as the German government has slowed the pace of transfers to exchanges, with only 250 BTC being sent yesterday. This could potentially suggest an end to their current selling regime.
Additionally, Bitcoin ETFs experienced net outflows of $52.4 million over the past two days after seven consecutive days of outflows. Taking these factors into account, QCP Capital, in its latest analysis, interpreted the market to be ripe for bitcoin accumulation.
Such an interpretation could also signify that the asset is now preparing from a leg up.
Bitcoin Preparing For Leg Up?
CryptoQuant’s latest research also hinted at signs that the leading asset’s local bottom has formed. The on-chain intelligence platform highlighted that the OI decreased by $3 billion in the futures market as a result of long liquidations. The funding rates for perpetual contracts too neared zero, which was indicative of a “balanced market” with a “healthier and less overly optimistic price structure.”
Moreover, this week’s BTC plunge below $60,000 attracted several buyers. In fact, holders controlling 0.1% of the total bitcoin supply added 7,130 BTC to their stash in just one day. The newly purchased BTC is worth around $436 million. Interestingly, this particular accumulation also marked the highest net inflows since late May, which could suggest that investors are confident about the price going up from here on.
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