Bitcoin managed to surpass $35,000 several times this week, making its market capitalization $679.499 billion.
A look at Bitcoin price action shows that consolidation has resumed below the $35,000 support level, but most holders are holding steady. Onchain data has revealed that the amount of immobile Bitcoin in a 3-month period has reached a record high of 88.5%.
The upside potential remains huge despite the ongoing consolidation, as the top cryptocurrency is still up 26% since the beginning of October.
BTC Price Falls Below $35,000 But Investor Sentiment Remains Bullish
Bitcoin managed to surpass $35,000 several times this week, boosting the profitability of millions of BTC wallets. The cryptocurrency has since fallen below $35,000, but long-term investors remain optimistic, according to on-chain analysis of Bitcoin’s movement.
One particular metric that speaks volumes about the current Bitcoin cycle is Glassnode HODL waves. HODL Waves change color depending on your age on wallets. Bitcoins start red immediately after being transferred to wallets and gradually turn purple as they remain stationary.
This metric, which tracks the age of Bitcoins in motion and in wallets, has shown that almost 90% of the total BTC supply has remained idle over the past three months.
A similar metric from IntoTheBlock has shown retail traders joining the bandwagon of long-term holders as investors begin to hold on to their assets amid the prospect of a BTC spot ETF approval from the SEC. IntoTheBlock’s holding metric puts the number of addresses holding Bitcoin for more than a year at an all-time high of 34 million addresses.
Investors Anticipate SEC Approval of Bitcoin Spot ETFs
Several factors have contributed to the rise in long-term confidence of Bitcoin investors, one of which is the start of spot ETF trading in the United States. The industry hopes that the SEC’s approval of spot Bitcoin ETFs will trigger the next Bitcoin price bull run. A senior executive at Valkyrie Investments is very confident that these ETF applications will be approved by the end of the month.
However, Singapore-based QCP Capital attributed Bitcoin’s recent rise to macro forces such as falling US bond yields, not enthusiasm around spot ETFs. Low bond yields force investors to look for higher-yielding investments like BTC.
Overall, Bitcoin appears to remain in a consolidation phase until buyers return or some catalyst fuels the next rally. The last time Bitcoin supply reached 88% for this metric was during a consolidation in late 2022, where the bears improved and Bitcoin fell below $20,000. Continued consolidation could see Bitcoin follow this pattern, breaking below its current range to reach $30,000.
The Fear and Greed Index has recorded “Extreme Greed” levels in Bitcoin, leading some to warn about the possibility of a price correction. Anthony Rousseau, Head of Brokerage Solutions at TradeStation, analyzed this situation and highlighted that the recent increase in the price of Bitcoin is due to a series of fundamental and market factors that have come together.
However, he also warned that there is always the possibility of a liquidity event in the market at the macro level, with negative implications for high-risk assets, including Bitcoin.
The brokerage expert suggests that, in the short term, there is a possibility of Bitcoin falling back to the range it was trading in at the beginning of the year, between $25,000 and $30,000. Given current market conditions and the hype surrounding the ETF in place, though, Rousseau believes the likelihood of a move below $30,000 is lower as prices continue to rise.
By Leonardo Pérez
