Bitcoin is currently down 23% from its peak price, with most of those losses coming over the past week.
The summer crash had been predicted on the premise that the four-year cycle was too early to peak.
On July 7, market analyst Benjamin Cowen eyed the Bitcoin bull market support band (BMSB) as a key technical indicator to determine if the asset will recover later this year.
BMSB a Key Indicator
The analyst compared current trends to historical patterns from 2013, 2016, 2019, and 2023, particularly examining BTC’s relationship with its BMSB.
He suggests that Bitcoin’s performance in Q4 2024 may depend on whether it can rise above the BMSB in the coming weeks.
In 2023, Bitcoin dropped below its BMSB in August, stayed below it for a few weeks, and then rallied hard in Q4. However, after falling below this level, the asset continued to decline in Q4 of 2019.
He said that the cycle peak usually comes in the fourth quarter of the year after the halving, which would be 2025, before concluding that it could still go either way:
“If we follow 2019, then the BMSB should hold resistance. If we follow 2013, 2016, and 2023, then BTC should get back above the BMSB soon.”
We talked a lot about the idea of a #BTC summer lull well in advance. Now that it has happened, what comes next?
I think what happens in Q4 2024 depends on if #BTC can get back above its bull market support band in the next few weeks, or if it holds resistance.
A thread 👇
— Benjamin Cowen (@intocryptoverse) July 7, 2024
Fellow analyst ‘Rekt Capital’ observed on July 8 that Bitcoin is on the cusp of performing its first weekly candle close below the re-accumulation range low for the first time in over four months that this range has existed.
The asset has been trading sideways within this range since late February but has now lost support and broken down below it.
Analytics platform CryptoQuant advised caution after observing that the long position liquidation had been the largest this year.
“However, we can’t easily conclude that ‘now that we’ve had a massive long liquidation, we’ll bounce back’,” analysts warned before adding, “that’s because it took a couple of months (from Aug to Oct in 2023) before the price started to bounce back.”
Market crush triggers massive long liquidations
“The recent $BTC price plunge has been devastating for long position holders. As you can see, the size of the long liquidation is by far the largest for the last year.” – By @marketmakercopy
Link 👇https://t.co/xFKl5iyOrC pic.twitter.com/UNhebMTND3
— CryptoQuant.com (@cryptoquant_com) July 8, 2024
BTC Price Outlook
The consensus seems to be a more bearish sentiment and possibly another dip before consolidation for a couple of months, followed by another movement in Q4.
Bitcoin had recovered $57,000 at the time of writing following a dip to $54,320 during the Monday morning Asian trading session.
There is support at $51,500 on the downside but an upward move would need to break resistance levels at $60,000 to progress further.
Moreover, this week’s US inflation reports could induce more volatility in already shaken crypto markets.
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