Ark Invest Predicts A Sharp Increase in Bitcoin Price

Key Insights

• Over the past July, the bitcoin exchange rate has lost 4%
• However, the situation may lead to a sharp increase in BTC, Ark Invest analysts say.
• They named three factors that could contribute to this.

The investment company Ark Invest has released its monthly bitcoin report for July 2023. Experts analyzed why the cryptocurrency was stuck in a range for a long time and identified several dominant trends in the market.

Bitcoin’s perfomance in July

At the end of July, the price of bitcoin ended July at $29,230, having lost 4% over the month. This is almost 10% above the 200-day moving average, which is currently at $26,630. In addition, the 90-month volatility of Bitcoin has decreased to 36% over the past month. The last time such low values ​​were recorded was in January 2017.

According to Ark Invest analysts, such a lull usually precedes a powerful breakout or a sharp increase in volatility in the crypto market.

Given the low level of volatility in July, we believe that in the coming months, bitcoin will show large-scale movements in one direction or another, the company said in an analytical report.

Related: Stablecoin Supply Trends: Indications for Bitcoin Rally?

3 reasons why Bitcoin may rise soon

Although it is difficult to predict the direction of the trend at this stage, Ark Invest analysts have identified circumstances that could potentially contribute to the growth of Bitcoin over the coming months.

1. The capitulation of the miners. In July, the 30-day moving average of bitcoin hashrate fell below the 60-day moving average. According to Ark Invest analysts, this is one of the signs of miners capitulating, which is usually associated with oversold BTC and an upcoming reversal in the bullish direction.

It is believed that miners capitulate when they have to sell the mined coins in order to cover the cost of electricity and equipment.

2. A high coefficient of network activity is the so-called “network liveliness”. This indicator measures the potential selling pressure in relation to the current behavior of the holders – the lower, the less willing to sell in the market. In July, this indicator fell below the 60% mark for the first time since the end of 2020, which indicates the desire of investors to “hold” the coins.
3. The ratio of short-term profits and losses (ARK statistics). In July, this indicator consolidated around one, which means that the majority of short-term holders were in the breakeven zone.

According to Ark Invest, the proportion of long-term Bitcoin holders has approached 25%.

Related: Standard Chartered Analysts Bullish on Bitcoin: Forecasts $120,000 by 2024

Analysts at Ark Invest explain that “the break-even level correlates with both local lows during bull markets and local highs during bear markets.”