Recent Bitcoin market sentiment has been somewhat subdued. However, two analysts have different views. One believes that Bitcoin has not entered a bear market, while the other believes that the bullish prospects of Bitcoin need to be monitored in the coming weeks.
Bitcoin’s price has been hovering around $58,000 recently, with the cryptocurrency fear and greed index at around 40, indicating a moderate level. The market is waiting to see if Bitcoin can return to a raging bull market after the Federal Reserve announces its interest rate decision next week.
Prominent analyst Willy Woo, from the cryptocurrency community, tweeted that since the halving in April, Bitcoin has shown a bearish trend in both demand and supply. However, over the past four weeks, there have been signs of a reversal (yet to be confirmed), but it may still take more time to break through historical highs. He also pointed out that from a macro perspective, Bitcoin has not entered a bear market and is currently in a phase of accumulation.
OnchainTarek, an on-chain analyst at CryptoQuant, also pointed out in an article titled “Bitcoin’s Next Bull Market?” that the decrease in Bitcoin reserves on exchanges indicates a significant reduction, which usually precedes price increases. This means that investors are transferring Bitcoin to cold wallets, limiting the available supply in the market and reducing selling pressure. Historical data shows that this phenomenon often precedes price peaks, and a similar situation may be happening now.
Additionally, the increasing reserves of stablecoins on exchanges indicate that investors are preparing to enter the market. Stablecoins represent funds that can be deployed at any time, and their increase shows that investors are waiting for the right moment to enter the market, indicating strong buying intentions.
The decrease in Bitcoin reserves and the increase in stablecoin reserves lay the foundation for a potential price breakthrough. With the decrease in Bitcoin supply and increased purchasing power, the market is ready for a price increase. Historically, supply-demand imbalances have often led to significant price increases.
In conclusion, the decrease in Bitcoin reserves and the increase in stablecoin reserves indicate bullish prospects for Bitcoin. With the tightening supply in the market and increased purchasing power, we may be on the edge of a price increase. Investors should closely monitor potential market breakthroughs in the coming weeks.
As for whether now is a good time to enter the Bitcoin market, based on Bitcoin’s monthly return rate, it can be observed that in the past 11 years (from 2013 to 2023), Bitcoin’s performance in September has usually been poor, with 8 instances of decline and a high probability of 73% for a decline. In addition, looking at the average monthly return rate, September is also the month with the highest number of declines, with a decline of up to 4.78%. However, October is usually a month of upward movement, so non-leveraged investors may consider buying on dips in September.
In addition to overall economic risks, according to Arkham Intelligence data, although Mt. Gox has already returned most of the Bitcoins, its wallet still holds over 40,000 BTC, and ongoing repayments may still pose risks to the price. Furthermore, the US government transferred nearly 600 million US dollars of Bitcoin related to Silk Road in mid-August, and it is currently uncertain whether it is for custody or preparing for sale, which is also a detail worth noting.