Bitcoin has been on quite a roller-coaster journey in the past months, starting from a disheartening low value before the inception of 2023. After going down almost 65% in price and seeing major holders turn the asset back to cryptocurrency exchanges, it’s safe to say that hope of a resurgence has vanished for most investors.
It has kept a low profile for the better part of the year, rising and falling from unexpected heights. Needless to say, the previous weeks witnessed heartening improvements as the price of Bitcoin has been pushing towards the $30.000 level.
Newcomers to cryptocurrency and seasoned investors alike are watching the constant market trends, regulatory framework changes, overall investor sentiment, and other vital factors that may provide insights into the asset’s immediate performance. Experts believe that even if the bear run isn’t over and may go on a little bit longer, there is light at the end of the tunnel.
Here are the most recent movements and changes in Bitcoin’s sight – let’s explore them to gain an insight into its current status.
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Bitcoin sharks and whales amassed large amounts of Bitcoin earlier last month
The whole array of cryptocurrencies entered the summer season on the right foot, seeing prices considerably higher than in previous spring months. For this reason, the activity on Bitcoin’s network of the most critical players in the market didn’t fall short of expectations, pointing to increased hope of a price explosion.
On-chain data from the cryptocurrency analytics platform Santiment indicated remarkable activity on the Bitcoin network in the first week of July. The asset transitioned to $31,000, reaching a new peak for the current year.
Major investors represented by whales and sharks have gathered massive amounts of the flagship’s cryptocurrency at every moment during last month’s rally, accounting for 71,000 coins or the equivalent of $2.15 billion. This is a significant amount compared to previously registered accumulation numbers.
Even if cryptocurrencies behave well for a prolonged period and inflict hope for a price outbreak, that doesn’t mean the favorable scenario holds on. Bitcoin rewarded quick-on-the-uptake investors when it broke the $3K mark, and as it’s nothing out of the norm in the volatile realm of digital coins, its price began declining by the middle of the month.
Strong price fluctuations aren’t a reason to worry, nor are they unusual in the cryptocurrency market. In fact, they provide the opportunity to make quick returns on investment for investors with trading strategies like scalping. This trading behavior enables investors to generate rapid gains by profiting from small price movements.
Influential wallets started seeing a Bitcoin outflow as the price began declining
Following its surge to the $31,000 level, the reigning cryptocurrency encountered selling pressure, causing it to move downward and approach an approximately $1,000 lower level. Bitcoin outflow from influential wallets became noticeable by the end of the month, as it was hovering under $30.000.
Yet, the Bitcoin exchange reserve metric decline over the last thirty days is not all bad news. This trend may suggest bullish sentiment among the masses.
Whales and sharks have been loading their bags with stablecoins
Sharks’ and whales’ activity shows no signs of slowing down, even if the flagship crypto’s price is rather dull in its struggle to break the $3k barrier. Their highly influential wallets have accumulated stablecoins such as BinanceUSD, USDCoin, Tether and DAI during Bitcoin’s slump below the $3k level.
The activity of Bitcoin whales on the network has been on a downward trajectory in the past few months. This triggered eye-raising discussions in the expert community, proposing different possibilities that may come to fruition.
The powerful entities may be preparing for a correction in Bitcoin’s price and looking to capitalize on the current market’s swings. Sharks and whales may strategically conduct trading maneuvers at the most profitable times, creating room for possible returns when prices start trading in the green again.
Overall, ongoing investments in stablecoins point to potential market fluctuations.
Government regulation is a highly-influential factor
Regulatory frameworks play a crucial role in the future, adoption, and stability of Bitcoin and other cryptocurrencies. Regulatory bodies and governments establish these frameworks to decide how the token is traded, sold, bought, taxed, held, and exchanged.
Precise and favorable regulations may foster the cryptocurrency’s expansion and provide much-needed clarity in the financial sector, promoting a conducive ecosystem. Contrarily, unclear and restrictive rules can produce uncertainty and hinder Bitcoin’s adoption, preventing financial institutions and businesses from exploiting the new technology.
These factors also play a role in the cryptocurrency’s value. In the United States, for example, accepting or denying a spot market Bitcoin ETF can considerably impact the asset’s value in the upcoming period. There are two sides to the coin. On the one hand, the probability of approval seems significant. On the other hand, the SEC has already denied other spot Bitcoin ETFs on the grounds that they may leave room for manipulation.
If the ETF proposal is approved, then more institutional actors may add the pioneering cryptocurrency to their investment portfolios, potentially boosting liquidity by transferring capital into the market.
On the other hand, if the SEC doesn’t embrace the proposal, it could impact the market in several ways, such as the following:
- Hampered institutional adoption
- Limited retail access
- Maintained market volatility.
Mining power criticism is detrimental to prices
While sufficient signs indicate a price correction for Bitcoin, there is also a not-so-favourable scenario where Bitcoin is the magnet of criticism and judgmentalism. It has long been pushed against the wall by the power-greedy mining mechanism behind it, even though an impressive fraction of Bitcoin mining now uses regenerable energy resources such as solar, hydro, or wind power.
Energy consumption criticism may hamper Bitcoin’s surge. China has made Bitcoin and related mining activities illegal, leading to a decline in the network’s hash rate and negatively affecting its value.
Whether Europe and the US act similarly will significantly affect Bitcoin’s future price.
Whether the price of Bitcoin will slump or surge depends on a multitude of factors, and no expert opinion or past prediction can predict its future. If you are going to invest in Bitcoin or any other cryptocurrency, make sure to keep an eye on how the market evolves.
