However, according to the analyst, even though market conditions are beginning to recover, a sustained uptrend requires regular capital inflows into spot Bitcoin ETFs and a strengthening of buying activity in the US spot market to be confirmed.
On-Chain Data Giving a Bottoming Signal!
The analyst also considers the improvement in macroeconomic conditions among the possible signals of a bottoming out. At this point, market expectations regarding the probability of a Fed interest rate hike in October have fallen to approximately 18%, and Brent oil prices have dropped from levels close to $110 per barrel to around $103.
In addition, the analyst cited changes in three on-chain indicators as bottoming signals. According to the analyst, the first indicator shows that Bitcoin holdings on exchanges have recently recovered but remain at a low level. Second, ‘Apparent Demand,’ which indicates new demand for Bitcoin, has also rapidly recovered from a significantly negative level. Third, the amount of Bitcoin held by whales has also increased. It was stated that the Bitcoin holdings of large investors have reached approximately 3 million $BTC and maintained a high level even during the recent price correction.
According to the analyst, these indicators suggest that conditions are improving for a bottom formation in Bitcoin. However, a definitive bottom confirmation requires sustained ETF inflows, strengthening buying in the US spot market, and continued demand recovery.
There’s a Possibility of Correction!
The analyst noted that while October historically stands out for its bullish expectations, a potential rise in October doesn’t necessarily have to be uninterrupted.
The analyst says that current data suggests a correction could pave the way for a new uptrend. However, confirmation of strengthening market demand is needed to say that Bitcoin has formed a permanent bottom.
“…The October rally doesn’t necessarily mean uninterrupted gains. A correction could lay the groundwork for the next rally.”
*This is not investment advice.
