Bitcoin Enters Bull Phase as Analysts Warn of Pullback
Bitcoin has emerged from its bear market. However, anticipate a potential retracement. According to analysts, the coin is exhibiting behaviour consistent with its historical patterns. Ki Young Ju, stated on X Tuesday that the asset had “entered into the early bull phase.” Ju highlighted the movements that bitcoin exhibited in its previous cycle prior to entering a bull market, asserting that the cryptocurrency is currently displaying similar behaviour. Research indicates that bitcoin is flowing back to derivative exchanges, signalling that traders are in “risk-on” mode, which historically marks the beginning of a new bull cycle.
Another analyst, Theophiluspep, noted that while the coin is entering a bull market, “spot demand, ETF flows, and market momentum have turned decisively bullish, but elevated profit-taking, exchange inflows, and overbought conditions suggest a potential near-term cooldown.” He added: “This looks increasingly like a genuine regime shift into the early phase of a new bull market, driven more by improving spot demand and institutional ETF buying than by excessive leverage.” Bitcoin began its upward trajectory last week. It is currently up 22% over a seven-day period and was recently priced at $78,716. It briefly reached $81,160 on Monday. Its ascent follows a lacklustre performance in June and July, during which it predominantly traded beneath $65,000.
Last week, U.S. investors shifted their strategy and increased their purchases of shares in bitcoin exchange-traded funds, marking the funds’ strongest performance since October – coinciding with the period when bitcoin reached its peak of $126,080. Data indicates that the funds, overseen by prominent firms such as BlackRock, Fidelity, Greyscale, and Morgan Stanley, attracted $1.9 billion in fresh capital. The shift in sentiment follows the Treasury Department’s announcement last week to at least double the scale of its long-dated bond buybacks.
Since the Treasury made the announcement, yields have decreased, while bitcoin and gold have surged. The dollar last week was trading at a three-month low and on track for its worst week of August. Bitcoin, conversely, experienced its most favourable week since 2023. Positive regulatory developments emanating from the White House have contributed to the favourable sentiment: President Donald Trump convened a meeting with cryptocurrency executives earlier last week, advocating for lawmakers to advance the Clarity Act.
