Bitcoin: Will Prices Easily “Explode” Past $74,000 Or Dump Due To Miner Capitulation?
16 May 2024 - 5:00AM
NEWSBTC
Bitcoin prices have been trending lower in the past couple of weeks
and generally remain within a bearish formation. Although momentum
appears to be picking up, bulls are not out of the woods just yet.
Analysts are not losing hope and remain overly upbeat, expecting a
surge that would take the world’s most valuable coin to new levels.
Bitcoin Forms A “Cup And Handle” Formation In The Weekly Chart In a
post on X, one of them, MikybullCrypto, said Bitcoin has
formed a “cup and handle” reversal pattern, suggesting an imminent
surge towards new all-time highs. This formation is a
glimmer of hope for optimistic traders, especially now that prices
have been moving lower and sideways, erasing gains posted in March.
The “cup and handle” formation is a technical pattern chartists
use to identify potential reversals and confirm trend
continuations. In the current setup, as identified by the
trader on the weekly chart, the “handle” was formed after the
recent price drop from all-time highs. The “cup” follows the price
decline in 2022 and the subsequent recovery in 2023. Related
Reading: Crypto Analyst Shares Top AI Altcoin Investments This
Month Historically, if there is a breakout above the handle and the
rim of the cup, prices tend to rally to new levels. For this
reason, the analyst says that if buyers press on from spot rates,
the breakout above the current range and all-time highs of $73,800
will be “explosive.” For now, prices remain in a
descending channel with clear resistance levels marked out in the
immediate term at around $66,000 and $72,000. A breakout, reading
from the candlestick formation in the daily chart, above these
liquidation levels could spark demand, lifting the coin to new
levels. Will Miners Dump BTC And Force Prices Lower? However,
lurking beneath the optimistic outlook is a potential storm cloud:
declining on-chain activity. After the brief spike in on-chain
activity on Halving Day due to the launch of the Runes protocol,
transaction fees have been declining. According to YCharts, it is
currently at $3.206, down from over $128 on April 20. This
contraction means miners are getting less revenue, heaping more
pressure now that there is more pressure on margins post-Halving.
Related Reading: XRP To Nearly $600? Analyst Makes Bold Claim, But
Can It Overcome Legal Hurdles? Now that miners are feeling the
pinch of slashed block rewards and declining transaction fees, it
is likely that they might liquidate some of their BTC to
stay afloat. Their participation, especially in the secondary
market, would heap more pressure on BTC, forcing prices
lower. Feature image from Shutterstock, chart from
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