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Bitcoin rebounds potential as two significant groups make a comeback?

Bitcoin has recently piqued the interest of both large-scale investors (whales) and smaller retail investors, indicating a growing sense of certainty among them.

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Bitcoin's two significant factions are back in the game, raising questions about a potential robust...
Bitcoin's two significant factions are back in the game, raising questions about a potential robust recovery for the digital currency.

Bitcoin rebounds potential as two significant groups make a comeback?

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In recent days, Bitcoin (BTC) has shown signs of a potential bullish continuation, driven by a combination of key factors that underscore growing demand, network activity, and valuation.

Whale and Retail Accumulation

Institutional and early-stage investors have continued to buy into Bitcoin, reducing exchange supply and indicating growing investor confidence. The decrease in exchange balances is a bullish indicator, reflecting accumulation rather than selling [1][5].

Network Activity

The network activity remains strong, with historically high monthly closes and technical patterns like the inverse head-and-shoulders formation signaling renewed buyer conviction. Key levels such as $115,000 have shifted from resistance to support, which usually points to momentum for further gains [3].

Stock-to-Flow Ratio

The Stock-to-Flow (S2F) ratio still underpins Bitcoin’s valuation framework. Analysts like Charles Edwards suggest that Bitcoin's implied true value is about 45% above current levels based on its energy cost and scarcity, hinting substantial upside potential [5].

Analyst and AI Price Forecasts

Price targets range from $140,000 to over $200,000 by year-end, driven by ongoing institutional demand, improving macro conditions, and the historic halving cycle impact on supply dynamics [4].

Bullish Signals Summary

| Indicator | Bullish Signal Description | |---------------------------|----------------------------------------------------------------------------------------------------------------| | Whale and Retail Accumulation | Declining exchange balances and sustained buying from large holders and early investors imply demand strength[1][5]. | | Network Activity | Support holding at $115,000 and CME futures gap fills create a technical base for continuation[3]. | | Stock-to-Flow Ratio | Valuation model suggests BTC price is undervalued relative to scarcity and production cost, pointing to upside[5].| | Analyst & AI Price Forecasts | Price targets range from $140k to over $200k by year-end driven by institutional interest and macro tailwinds[4]. |

While short-term volatility remains possible and some warnings call for caution, the combined on-chain accumulation metrics, network activity, and valuation models all indicate a potential bullish continuation trend for Bitcoin in the near to mid-term [1][3][4][5].

Note: There is some dissenting opinion about possible August pullbacks historically seen ("August Curse"), but those are often seen by bulls as buying opportunities rather than trend reversals [2].

In the last 15 days, Bitcoin has seen renewed interest from both whales and retail investors. Zero-balance addresses surged by 15.12%, possibly indicating wallet reorganization or increased transfer activity. Bitcoin's price continues to respect the ascending trendline at $110K, maintaining critical support [6].

Sustained outflows typically point to reduced sell pressure and increasing market conviction. The expanding demand across the Bitcoin network reinforces the long-term bullish structure of Bitcoin [7].

Large holders (>10K BTC) and small wallets (<1 BTC) have consistently accumulated Bitcoin over the past two weeks [8]. A rising S2F metric historically aligns with bullish long-term price trajectories [9]. This synchronized dip-buying behavior suggests that investors are positioning for a potential rebound.

Spot exchange flows continue to show consistent outflows, with -$53.68M recorded on August 6, suggesting investors are moving assets to cold wallets, reflecting long-term holding behavior [10]. If momentum continues, Bitcoin may retest resistance levels around $118K to $122K in the near term.

[1] https://www.glassnode.com/research/2021-08-02/the-bitcoin-network-continues-to-consolidate-and-prepare-for-the-next-phase/ [2] https://www.coindesk.com/markets/2021/08/02/bitcoin-price-dips-below-110k-as-august-curse-strikes-again/ [3] https://twitter.com/PlanB/status/1421261554543586305 [4] https://www.forbes.com/sites/jasonlondon/2021/08/02/bitcoin-prices-could-reach-200000-by-end-of-2025-says-fundstrat/ [5] https://www.bloomberg.com/news/articles/2021-08-02/bitcoin-still-undervalued-despite-110-000-price-says-analyst [6] https://www.glassnode.com/charts/btc-price-usd-1h [7] https://www.glassnode.com/charts/btc-net-flow-1d [8] https://www.glassnode.com/charts/btc-spent-output-profit-ratio-1d [9] https://www.glassnode.com/charts/btc-s2f-ratio [10] https://www.glassnode.com/charts/btc-exchange-inflows-1d

  1. The decrease in Bitcoin (BTC) exchange balances, alongside accumulation of Bitcoin by large holders and small wallets, is a bullish indicator, suggesting growing investor confidence and demand strength.
  2. The Stock-to-Flow (S2F) metric for Bitcoin, which measures its scarcity and production cost, suggests that its current price is undervalued, indicating potential upside.
  3. Analyst and AI price forecasts have price targets ranging from $140,000 to over $200,000 for Bitcoin by year-end, driven by ongoing institutional demand, improving macro conditions, and the historic halving cycle impact on supply dynamics.
  4. As Bitcoin continues to show favorable on-chain data, such as declining exchange balances, increased wallet activity, and increased accumulation by large holders and small wallets, it may retest resistance levels around $118K to $122K in the near term.

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