Key Points
- Bitcoin could surge into the euphoric “Banana Zone.”
- Reversal needed in miner selling, stablecoin inflows, and ETF outflows.
- Current Bitcoin price trends show a decline.
- Analysts predict potential market bottom and a near-term directional shift.
Bitcoin Could Enter the Euphoric “Banana Zone”
Bitcoin (BTC) might be on the verge of entering a euphoric phase dubbed the “Banana Zone,” which could see its price soar significantly. However, crypto analysts emphasize that this optimistic scenario hinges on reversing three crucial trends first. According to Julien Bittel, head of research at Global Macro Investor (GMI), the current phase is “The Boring Zone” preceding the anticipated surge.
The term “Banana Zone” was coined by GMI founder and crypto expert Raoul Pal to describe periods of substantial upward price movement. Yet, according to an analyst from CryptoQuant, a sustainable recovery requires reversing three critical indicators.
Bitcoin ‘Banana Zone’ is next if these 3 indicators play out#bitcoin #BTC #tafouio #cryptonews pic.twitter.com/vyVK0FKj5h
— tafou.io (@tafouio) June 19, 2024
Critical Indicators for Sustainable Recovery
1. Reduce Bitcoin Miner Selling:
Bitcoin miner selling pressure needs to decrease significantly. CryptoQuant’s pseudonymous analyst, IT Tech, highlighted that miners have been increasingly offloading their holdings due to a steep drop in mining revenue, which has plummeted by 55% since Bitcoin’s all-time high of $73,679 in March.
As of June 12, daily revenue from block rewards and transaction fees had decreased to $34.26 million from $78.89 million on March 11, based on Blockchain.com data. This decline in revenue has led miners to sell more Bitcoin to cover their costs, contributing to the downward pressure on Bitcoin prices.
2. Increase Stablecoin Inflows:
The market also needs an uptick in stablecoin inflows to boost liquidity and reduce price volatility. The lack of new stablecoin issuances has resulted in a nearly 10% decrease in the amount of stablecoins held in crypto exchange reserves over the past two months, currently standing at $21.96 billion, according to CryptoQuant data.
Stablecoins play a critical role in the crypto market by providing liquidity and a stable medium of exchange. Increased stablecoin inflows would likely help stabilize the Bitcoin market and support higher prices.
3. Decrease Bitcoin ETF Outflows:
Another significant factor is the outflows from Bitcoin exchange-traded funds (ETFs) such as Fidelity’s Bitcoin Wise Origin Bitcoin Fund (FBTC) and the Grayscale Bitcoin Trust ETF (GBTC). According to Farside data, these ETFs saw outflows of $83.1 million and $62.3 million, respectively, on June 18.
These outflows add to the selling pressure on Bitcoin, contributing to its recent price declines. A reduction in these outflows would indicate a renewed interest in holding Bitcoin through these investment vehicles, potentially signaling a bottom in the market.
Current Market Conditions and Future Predictions
As of now, Bitcoin is trading at $64,966, down 2.35% over the past 30 days and 12% below its all-time high of $73,679 in March, according to CoinMarketCap data. IT Tech believes that this decline might represent a market bottom, suggesting that the worst could be over for Bitcoin.
Altcoins have fared worse in the recent market downturn. Major altcoins like Solana (SOL), Dogecoin (DOGE), and Shiba Inu (SHIB) have seen seven-day declines of 8.23%, 11.67%, and 16.31%, respectively.
Julien Bittel commented on Bitcoin’s lack of significant price movement, describing the current phase as a “period of sideways chop.” Meanwhile, other traders, such as the pseudonymous crypto trader Rekt Capital, predict a directional shift in the near term. Rekt Capital noted that breaking the current downtrend line could initiate a price reversal for Bitcoin, potentially leading to the coveted “Banana Zone.”
