ARK Invest Takes a Close Look at Bitcoin’s Price, Reveals Key Factors

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In its recent report titled “The Bitcoin Monthly: July 2023,” Ark Invest, a prominent market insights firm, has analyzed the current state and potential future of Bitcoin’s price. The report suggests that Bitcoin’s price might undergo a significant change due to similarities with patterns observed in 2017. While it also reveals that BTC fell by 4.1% which is the lowest in 6 years in a month. In such a low volatility what could drive BTC price do we see a bull run or a bull trap? 

The report’s author, David Puell, an on-chain researcher at Ark Invest, provides a thorough analysis of Bitcoin’s current status and future prospects. 

The report highlights several key observations:

Low Volatility: The report points out that Bitcoin’s volatility has been relatively low over the past 90 days, similar to levels seen in 2017. Puell says such extended periods of low volatility have historically been followed by periods of increased activity, although the direction of this potential price movement remains uncertain.

Miner Dynamics: It is noted that the decrease in hash rate, known as miner capitulation, is considered a potentially positive signal. It could indicate oversold conditions and potentially hint at a bullish reversal. Additionally, he said the increase in “liveliness,” reflecting fewer holders selling their coins, is seen as a positive sign.

Short-Term-Holder Ratio: Whereas, his report says that the ratio of short-term holders’ profit/loss is linked with historical trend reversals. This could potentially support a bullish scenario, as this ratio has correlated with local bottoms during bull markets and local tops during bear markets.

External Factors at Play in Shaping BTC

Macro Factors: But he is also sure that the Federal Reserve’s interest rate hike could influence Bitcoin’s appeal as a non-inflationary asset, particularly if there’s a potential slowdown in CPI inflation.

Binance’s Role: Moreover, the ongoing SEC case against Binance, a major cryptocurrency exchange, could also disrupt the market. Binance provides significant liquidity for Bitcoin through its native token, Binance Coin (BNB). Legal challenges could potentially lead to market instability. 

Bitcoin’s Complex Outlook

Having said that, David Puell’s in-depth research of Bitcoin’s trajectory shows its complex nature. Regulatory issues and larger economic dynamics complicate the outlook, even when prospective signals are positive. 

As Bitcoin is currently hovering around $29,139, breaking through the critical resistance at $29,450 could play a pivotal role in shaping its future growth. At this point, it may determine whether Bitcoin experiences a sustained breakout or continues its consolidation, particularly given the recent weeks’ downtrend.