Bitcoin Rally Loses Momentum Amid Waning Buying Pressure

Bitcoin’s recent rally, which has seen the cryptocurrency surge by nearly 41% since hitting its year-to-date low of $73,273 on April 9, may be losing momentum. According to analysts from Bitfinex, the buying pressure that has driven this uptrend is beginning to wane, signaling a potential period of consolidation or a local top rather than continued vertical acceleration.

The analysts noted that spot volume has decreased, taker buy pressure has weakened, and profit-taking has intensified, particularly among short-term holders who benefited from the price surge from levels below $80,000. This shift in market dynamics suggests that the cryptocurrency may be entering a phase where gains are not as rapid or sustained as they have been in recent months.

Bitcoin’s next move will be influenced by macroeconomic factors and ongoing institutional demand, particularly from exchange-traded funds (ETFs). US-based spot Bitcoin ETFs have seen inflows for 14 consecutive trading days, totaling $4.63 billion as of June 27. Economist Timothy Peterson described last week’s $2.2 billion inflows as “massive” and expects this trend to continue, which generally correlates with upward price pressure.

Additionally, Bitcoin traders are closely monitoring the Federal Reserve’s July 30 interest rate decision. Lower interest rates are typically bullish for the crypto market, and the current market estimates a 19% chance that the Fed will lower rates at that meeting. Despite short-term uncertainties, analysts maintain that the broader market structure remains strong, with higher time frame support levels still holding.

Some analysts remain optimistic about Bitcoin’s future. Economist Donald Dean believes that Bitcoin is poised to move higher with tight consolidation at the volume shelf. Capriole Investments founder Charles Edwards argued that long-term holder selling pressure has hindered Bitcoin’s price growth, despite recent institutional and corporate buying. Edwards noted that long-term holders, often referred to as “Bitcoin OGs,” have been selling their positions since the launch of spot Bitcoin ETFs in January 2024, contributing to the stagnation around the $100,000 mark.

In summary, while Bitcoin’s recent rally has shown signs of slowing down, the cryptocurrency’s future trajectory will depend on macroeconomic factors, institutional demand, and the behavior of long-term holders. The current market dynamics suggest a transition phase, with potential for both consolidation and further gains. Analysts remain divided on the short-term outlook, but the overall market structure appears to be strong, supporting the possibility of continued growth in the long term.