Originally published on: August 04, 2024
The price of Bitcoin has taken a hit, dropping over 4% in the last 24 hours and slipping below the $60k mark. Despite this dip, there is hope on the horizon thanks to a maturing Wyckoff reaccumulation pattern that suggests a retest of $74,000 could be in the cards in the near future.
For those unfamiliar, the Wyckoff reaccumulation pattern is a technical indicator that highlights consolidation and accumulation phases following a prolonged uptrend. This pattern consists of nine critical stages, with Bitcoin currently in the “Test” phase, validating its Spring phase low and aiming for the Last Point of Support (LPS) at around $70,000.
Analysts predict that once Bitcoin reaches the ninth stage, known as the Sign of Strength (SOS), after retesting the peak level of the Wyckoff pattern, it will kickstart a new upward cycle. This final stage signifies a powerful upward movement and confirmed uptrend.
Despite recent setbacks tied to economic fluctuations, including a decrease in manufacturing activity and rising unemployment claims in the US, Bitcoin has remained resilient. The crypto market has seen withdrawal of approximately $200 million from Bitcoin exchange-traded funds (ETF) amidst growing chances of three rate cuts by 2024.
This shift in market behavior might be linked to the looming recession signals triggered by the latest US jobs report. Bitcoin has historically struggled during periods of heightened economic uncertainty, with a significant drop recorded during the COVID-19 market crash in 2020. A rebound followed when the Federal Reserve intervened with quantitative easing and rate cuts.
Experts such as Michael van de Poppe anticipate a similar trend in Bitcoin’s price movement in the upcoming weeks. Despite recessionary risks, a potential rebound is expected post the implementation of the Federal Reserve’s rate cuts in September.
Remember, this article does not offer investment advice. Readers are urged to conduct thorough research before making any financial decisions. Stay informed by subscribing to the Markets Outlook newsletter for more insights on spotting investment opportunities and refining trading strategies.