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Bitcoin price experienced a significant drop on August 5 due to global market crashes. However, subsequent rises and emerging signals suggest this drop might be a bear trap, and the price could reach a new record level in 2024.
Will Bitcoin Rise?
Bitcoin’s weekly price chart shows signs of a bullish divergence. More specifically, BTC’s price has formed lower lows since July, while the weekly relative strength index (RSI) has formed higher lows. This indicates weakening downward price movement and potential upward reversal.
To avoid false signals, it is important to confirm bullish divergences with multiple technical indicators. Bitcoin formed a pattern resembling a long Doji candlestick last week.
Typically, when this pattern appears after a strong trend (up or down), it can indicate a potential trend reversal or at least a pause before the trend continues.
The combination of the Doji candlestick formation and increased trading volumes near the lower trend line of Bitcoin’s bull flag formation suggests strong trader confidence in a potential price recovery. If this scenario occurs, Bitcoin could rise to around $66,500 by September, marking the upper trend line of the flag.
Bull flags typically indicate continuation patterns, and a strong close above the flag’s upper trend line could trigger a rally. In this case, the price could rise by an amount equal to the previous uptrend before the flag formed.
In simpler terms, the scenario where bull flag, Doji candlestick, and bullish divergence signals converge could push BTC price above $79,000 in the coming months.
Bitcoin Whales Are Buying
Bitcoin’s bullish signals also seem to be reflected in on-chain data tracking whale movements. According to data from Glassnode, Bitcoin whales holding at least 1,000 BTC have been withdrawing the most Bitcoin from exchanges since 2015, marking one of the largest increases in the past decade. Over the last 30 days, approximately 73,350 BTC have been withdrawn from whale exchange balances.
The market interprets the increase in Bitcoin withdrawals from exchanges as a bullish indicator, considering that whales prefer to hold their BTC longer rather than sell them for other crypto or fiat.
The last time such a large-scale withdrawal by Bitcoin whales occurred was in 2015, when BTC was trading around $220. This happened before the major bull run that saw BTC prices rise to $20,000 by December 2017.
