Bitcoin Price Dips During Summer Slump Anticipating Q4 2024 Prospects
Bitcoin recently experienced a significant drop, falling below $54,000 and its key 200-day average. This sudden downturn comes as two major events impact the crypto market: Mt. Gox is finally returning funds to creditors, and the German government is selling its seized Bitcoin.
Renowned crypto analyst Benjamin Cowen has been discussing Bitcoin’s summer slowdown, a period when its price tends to dip or remain stagnant. Now that this anticipated phase has arrived, Cowen is shifting his focus to the potential market trends for the rest of the year.
The crucial question is whether Bitcoin can surpass its Bull Market Support Band (BMSB) in the coming weeks or if it will continue to face resistance. Cowen has observed that Bitcoin is currently falling below its BMSB during the summer of 2024, which is not an unprecedented pattern.
For example, in August 2023, Bitcoin dipped below its BMSB, stayed there for a few weeks, and then experienced a strong rally in Q4. Cowen believes that what happens in Q4 2024 will depend on whether Bitcoin can reclaim its position above the BMSB in the next few weeks or if it remains resistant.
Cowen also draws comparisons between Bitcoin’s current performance and its post-halving period in 2016, suggesting that we may see similar trends this time around. Historically, Bitcoin tends to reach its peak in Q4 of the post-halving year, which would be 2025 for the current cycle.
Several key factors will influence Bitcoin’s future movements. These include whether it can climb back above its BMSB, the impact of changes in Federal Reserve policies, investor sentiment and trading volumes, and the performance of Ethereum, particularly the ETH/BTC ratio.
According to Cowen, Bitcoin’s fate in Q4 2024 will depend on its ability to reclaim its position above the BMSB. If it follows the patterns of 2013, 2016, and 2023, a strong recovery and rally could be on the horizon. However, if it mirrors the trend of 2019, Bitcoin may continue to face challenges.
As we navigate through the summer slowdown, all eyes will be on Bitcoin’s ability to break through its current resistance and the various factors that will shape its journey in the coming months. The future of Bitcoin remains uncertain, and it will be interesting to see how the rest of the year unfolds.