Key Points
- Bitcoin’s momentum has turned bullish for the first time in H2 2024, potentially due to historical uptrends linked to US elections.
- On-chain metrics show stagnation in BTC network growth, but whales are adding positions, indicating confidence in a price uptrend.
Bitcoin (BTC) experienced a significant bullish run last week, with its value increasing nearly 10%, from $62.5K to $69.4K. This surge was largely attributed to a strong spot market demand.
With this recent rally, Bitcoin is now only 7% shy of its all-time high (ATH) of $73.7K, which was hit in March. Analyst Stockmoney Lizards pointed out that this rally has flipped Bitcoin’s momentum to bullish for the first time in H2 2024.
Understanding Momentum
The Stochastic Momentum Index (SMI), a momentum indicator, measures Bitcoin’s price relative to a recent midpoint, indicating whether it is overbought or oversold. The current reading on the two-week chart showed a rebound above the neutral 50-level, suggesting a bullish reversal. This pattern mirrors the 2020 trend before Bitcoin broke its re-accumulation range, suggesting a possible bullish breakout.
Historical Trends and Predictions
Stockmoney Lizards also noted that the explosive Bitcoin uptrends associated with US pre-election periods might happen again. In 2016 and 2020, Bitcoin pumped 10% and 18% respectively, two weeks before the US elections. If this trend continues in 2024, a new ATH for Bitcoin before the US elections could be likely.
On-chain metrics, however, show a stagnation in Bitcoin’s network growth since July. Despite this, whales have been adding to their Bitcoin positions, indicating confidence in a price uptrend. The positive Whale vs. Retail Delta metric suggests that whales have been accumulating more Bitcoin than retailers since last week. A decline in this metric, however, could signal a potential Bitcoin retracement, with $66K being a key level of interest if a short-term pullback occurs.