Bitcoin is poised for an “explosive rally” as miners conclude their latest capitulation phase, according to the latest data from the hash ribbons indicator. This metric, which monitors two moving averages of Bitcoin’s hashrate, has entered long-term “buy” territory for the first time since mid-May.

Miner Capitulation Ends, Hash Ribbons Data Shows

The hash ribbons indicator tracks the 30-day and 60-day moving averages of Bitcoin’s hashrate, reflecting the estimated processing power miners dedicate to the network. A drop in the 30-day moving average below the 60-day moving average suggests miners are struggling, while the reverse indicates a reliable buy signal, historically followed by significant BTC price increases.

Bitcoin hash ribbons. Source: Capriole Investments

On July 23, the hash ribbons indicator exited “capitulation” for the first time in over two months. The last exit occurred in August 2023, when BTC/USD traded at under $30,000. “BTC just witnessed a rare hash ribbon ‘Buy’ signal,” noted popular trader Mikybull Crypto on X, predicting a “massive rally” in a separate post.

BTC/USD chart with hash ribbons data. Source: Mikybull Crypto

Raw data from monitoring resource MiningPoolStats shows Bitcoin hashrate at 676 exahashes per second as of July 22, reinforcing the bullish outlook.

BTC Price Action in Flux

Despite the positive long-term signals, Bitcoin’s price action remains volatile in shorter timeframes. After a recent recovery that pushed the market past $68,000, BTC price action has been in a state of flux. Traders and analysts are watching closely for the next significant movement.

Bitcoin hashrate raw data. Source: MiningPoolStats

The hash ribbons buy signal adds to the growing bullish sentiment in the Bitcoin market, suggesting that the cryptocurrency could be on the verge of a significant price breakout. As the market reacts to these developments, all eyes are on Bitcoin’s next move.

Bitcoin is experiencing a surge in institutional interest with over $530 million flowing into US spot Bitcoin exchange-traded funds (ETFs). Despite this bullish sign, some traders warn that such large inflow days have historically preceded periods of price weakness.

In a recent update on July 23, trader Skew highlighted the risk of a “headline curse” for Bitcoin. He noted that previous instances of substantial ETF inflows have often been followed by market sell-offs. The BlackRock iShares Bitcoin Trust (IBIT), the largest US spot Bitcoin ETF, saw a staggering $526 million in inflows on June 22. This recent influx brings the total ETF net flows for July 23 to $533.6 million, the highest since March.

BTC/USDT chart with peak IBIT inflows. Source: Skew

“Each time IBIT reported mid-high nine-figure inflow days, it occurred around market supply zones,” Skew said. He cautioned that while the inflows are positive, they are not always indicative of sustained upward momentum. Bitcoin was trading around $66,550 at the time of writing, down 1.5% for the day.

US spot Bitcoin ETF netflows (screenshot). Source: Farside Investors

Ethereum ETFs Fail to Boost ETH Price

Meanwhile, Ethereum’s new spot ETFs, which began trading on July 23, have failed to generate significant price movement for Ether. The price of ETH is flat on the day, showing only a modest 1.5% increase over the past week. This contrasts sharply with the pre-launch excitement Bitcoin experienced earlier this year.

BTC/USD 1-hour chart. Source: TradingView

“The lack of positive reaction to the Ethereum ETF launch is concerning,” trading firm QCP Capital noted. “The market seems to be waiting to see who will ‘sell the news’ first.” Analysts suggest that it may take several months to gauge the demand and impact of the spot Ether ETFs on the market accurately.

ETH/USD 1-hour chart. Source: TradingView

As Bitcoin and Ethereum navigate these ETF developments, traders and investors will be closely monitoring the market for further signs of price direction and sustainability.

Data from TradingView showed Bitcoin’s price strength rebounding after an initial dip at the Wall Street open. The launch of trading for spot Ether ETFs surprised market participants with impressive volumes, totaling over $100 million in just 15 minutes. This sent ETH/USD up 2.3%, recovering from an initial drop.

BTC/USD 1-hour chart. Source: TradingView

Popular trader Skew noted the expected take-profit selling in both perpetual and spot markets, with heightened open interest in ETH derivatives around the launch. Michaël van de Poppe, founder and CEO of MNTrading, highlighted the impressive early trading volumes, comparing them to Bitcoin’s first day. He predicted the Ethereum ETF to trade towards an all-time high within 1-2 months. Fellow trader Daan Crypto Trades described the initial flows as “decent,” anticipating increased market volatility.

Bitcoin Faces Near-Term Bearish Threats

Bitcoin retraced its own initial down move, retaking $67,000. Monitoring resource CoinGlass revealed new buyer liquidity at $65,750 and increased sell-side pressure above.

ETH market data. Source: Skew

Traders remained optimistic about Bitcoin’s future. Jelle, a popular trader, emphasized the strong foundations being built for the next bear market lows. In a bulletin to its Telegram subscribers, QCP Capital noted that the crypto market’s reaction to the ETH spot ETF launch was muted, with investors waiting to see if it follows the “buy the hype, sell the news” pattern.

ETH/USD 1-hour chart. Source: TradingView

QCP compared this to Bitcoin’s ETF launch, which saw a drop to $38,000 but hit all-time highs two months later. The firm warned of short-term downside risks, including fresh payouts to creditors of defunct exchange Mt. Gox and geopolitical uncertainty. They concluded that prices may remain subdued until momentum builds leading up to the elections.

Bitcoin targeted $68,000 at the Wall Street open on July 22, spurred by bullish events, including a significant interest rate cut by China.

China Enacts “Unexpected” Rate Cuts

Data from TradingView indicated BTC price aiming for range highs after briefly dipping below $67,000 earlier in the day. The price rebound coincided with mixed performances in Asian stocks as the People’s Bank of China (PBOC) cut key interest rates, surprising markets.

The PBOC reduced the seven-day reverse repo rate by 0.1% to 1.7%, alongside cuts to the one-year and five-year loan prime rates (LPR), according to Reuters. Larry Hu, chief China economist at Macquarie Group, suggested the unexpected cuts were due to a sharp slowdown in growth momentum in Q2 and the target to achieve this year’s growth goals by the third plenum.

BTC/USD 1-hour chart. Source: TradingView

Market commentator Holger Zchaepitz noted it had been nearly a year since the last Chinese rate cut, commenting that the Chinese stock market showed little enthusiasm.

Global interest rate cuts are crucial for the performance of risk assets, including cryptocurrencies. While China and Europe have begun rate-cut cycles, the US is expected to start in September.

Bitcoin Approaches Key Resistance

Bitcoin faced its last cluster of resistance before all-time highs, particularly the $69,000 level, which has been significant since late 2021.

“Bitcoin has canceled out almost the entirety of the -25.6% retrace,” noted popular trader and analyst Rekt Capital. “It took two weeks to almost fully cancel out a five-week retrace.”

Central bank interest rate expectations. Source: TXMC Trades/X

Rekt Capital’s chart compared recent BTC price behavior to other retracements during the bull market, highlighting the latest as the deepest in the current uptrend. They suggested any dips to retest $65,000 would be typical, generally leading to an upside towards $71,500.

BTC/USD comparison. Source: Rekt Capital/X

The analyst reiterated the possibility of new all-time highs by September, at the latest. Michaël van de Poppe, founder and CEO of trading firm MNTrading, also highlighted the importance of $65,000 as support, with range lows at around $61,000 being the next line of defense. Van de Poppe predicted that maintaining these levels would facilitate a continuation towards the all-time high.

BTC/USDT chart. Source: Michaël van de Poppe/X

In summary, Bitcoin’s recent performance and China’s unexpected rate cuts have generated optimism, with analysts predicting potential new all-time highs within the next two months.

Bitcoin has recently approached a crucial bull market trendline that previously led to 30% gains. Data from the on-chain analytics platform CryptoQuant reveals that Bitcoin’s price is retesting the short-term holder’s (STH) realized price, bringing short-term holders back into profit territory.

Bitcoin Price Sends Short-Term Holders into the Black

The activity of Bitcoin’s STH cohort is a critical reference point during bull markets, as their aggregate cost basis often forms long-term price support. Since the bull market began in early 2023, BTC/USD has only briefly dipped below the STH realized price. This trend is coming to an end, with STH entities—those holding BTC for 155 days or less—no longer experiencing losses.

Bitcoin STH realized price. Source: CryptoQuant

“Recently, the Bitcoin price has reclaimed the STH Realized Price,” CryptoQuant contributor J. A. Maartunn noted in a blog post on July 18. “This is a positive sign because short-term holders often add to their positions when Bitcoin returns to their average cost basis, creating a support level.” Maartunn also highlighted that since 2023, Bitcoin reclaiming the STH realized price has led to at least 30% profits twice.

STH Realized Price Variations and Profitability Declines

The exact level of the STH realized price varies by source, with CryptoQuant’s estimate being slightly lower than others. On-chain analytics firm Glassnode, in its July 16 newsletter, reported that the STH realized price was $64,300 at the time of writing. Glassnode also noted a dramatic decline in STH profitability, with more than 66% of their supply moving into an unrealized loss over the past 30 days.

BTC/USD chart. Source: Aksel Kibar/X

Key Resistance and Market Sentiment

The area around $65,000 remains a crucial target for Bitcoin bulls to convert into support. A well-known trader and former fund manager, Aksel Kibar, expressed optimism, stating, “This is the 5th month $BTCUSD is not backing off from the strong resistance around 65K. I see this as very bullish long-term. Sticking to a resistance and no intention of selling off is usually a sign of a pending breakout.”

Volume Concerns and Market Dynamics

However, popular crypto trader JT cautioned that BTC/USD needs to break through several Fibonacci retracement levels for a shot at new all-time highs. He also noted that trading volume has significantly decreased since the recent price pump off the $53,000 low, highlighting that current volumes are below-average profiles.

BTC/USD chart (screenshot). Source: JT/X

In summary, Bitcoin’s approach to the key STH realized price trendline and the market dynamics around $65,000 suggest the potential for significant gains, though concerns about trading volume remain.