- Coinbase inflows show sustained Bitcoin bullish momentum, with the 30-day moving average above the 90-day since early 2023.
- Analyst Cowen warns a failure to break resistance could lead Bitcoin to drop to $42,000, aligning with the 100-week moving average.
- Institutional investors play a key role in driving Bitcoin's upward trend, with demand potentially pushing BTC towards the $70,000 mark.
Bitcoin’s bullish momentum may still be intact despite recent price fluctuations. According to CryptoQuant analyst Axel Adler Jr., a key on-chain indicator known as the Coinbase Flow Pulse continues to show signs of strength. This indicator tracks the amount of Bitcoin flowing into Coinbase from other centralized exchanges, offering insights into investor behavior.
Consequently, Adler shared that both the 30-day and 90-day moving averages of this indicator have been rising since early 2023. This trend suggests that inflows into Coinbase have been consistently increasing, which could point to continued confidence in Bitcoin.
Notably, the 30-day moving average remains above the 90-day, indicating that the inflows have not only persisted but accelerated recently. In the past, when these lines were aligned in this manner, Bitcoin typically entered a bullish market phase.
Potential Downside Risks Amidst Bullish Indicators
However, while Adler’s data suggests a sustained upward trajectory, not all analysts share the same optimism. Benjamin Cowen, a prominent market analyst, offered a contrasting perspective on Bitcoin’s current situation.
In a recent video, Cowen highlighted a technical challenge for Bitcoin, pointing out that the cryptocurrency has struggled to break above the upper trend line formed by a series of lower highs since March. He suggested that if Bitcoin fails to overcome this resistance, the market could see a significant pullback.
In addition, Cowen warned that a failure to breach the upper trendline could result in a drop to around $42,000, based on historical patterns. He linked this potential decline to Bitcoin’s behavior during past cycles, specifically noting that the 100-week moving average often acts as a key support level.
Furthermore, he pointed out that Bitcoin’s price fell to this level in Q4 2019 and Q1 2016. Cowen’s analysis suggests that if the current trend holds, Bitcoin might retest this support by December 2024.
Institutional Investors Remain a Key Force
Despite short-term volatility, institutional investors continue to exert a powerful influence on Bitcoin’s price movements. Large-scale investors have been a driving force behind Bitcoin’s recent rally.
Moreover, their continued involvement could be crucial in pushing the cryptocurrency closer to the $70,000 mark. The steady demand from institutions signals a strong long-term outlook for Bitcoin, as many view it as a valuable asset in their portfolios.
However, if institutional demand weakens or large investors begin to pull back, this could undermine the bullish sentiment and delay further price gains. As always, the market remains highly reactive to investor sentiment, and any shift in institutional behavior could have a significant impact on Bitcoin’s trajectory.
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