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Bitcoin&nbsp;is at a “pivotal point” as several onchain metrics signal further downside, while whales experience the fastest Bitcoin accumulation rate in more than a year, according to a new CryptoQuant report.
Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>)&nbsp;has been in a downtrend since turning away from its <a href="https://cointelegraph.com/news/bitcoin-price-new-73-6-k-all-time-high-etfs-eat#:~:text=Data%20from%20Cointelegraph%20Markets%20Pro,dip%20before%20abruptly%20heading%20higher.">new all-time high in March</a>. Over the last month, Bitcoin’s price action has been characterized by a series of lower highs and lower lows, reaching a <a href="https://cointelegraph.com/news/bitcoin-price-falls-below-58k-first-time-two-months">two-month low at $53,500</a> on July 5.
Despite rebounding back above $57,000, continued Bitcoin <a href="https://cointelegraph.com/news/german-government-354m-btc-sell-off">selling by the German government</a> and <a href="https://cointelegraph.com/news/mt-gox-repayment-crypto-market-volatility">Mt. Gox repayments</a> threaten further losses for BTC.
The CryptoQuant report reveals that the profit and loss (P&amp;L) index is hovering around its 365-day moving average (MA). The onchain data provider explains that if this index drops below its 365-day, <a href="https://cointelegraph.com/learn/what-is-bitcoin-a-beginners-guide-to-the-worlds-first-cryptocurrency#:~:text=Bitcoin%20is%20digital%20money%2C%20also,independently%20of%20any%20central%20authority.">Bitcoin</a> could embark on a major correction as those seen in previous drawdowns. 
<blockquote data-ct-non-breakable="true">
 “A crossover to the downside has been associated with major corrections (May-July 2021) or the start of a bear market (November-December 2021). See red circles.”
</blockquote>
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-07/b636f06e-180f-4381-9ef3-742287621e06.png" alt="Bitcoin price faces major ‘summer of 2021’ style correction despite BTC whale buying" title="">
 <figcaption style="text-align: center;">
 Bitcoin P&amp;L index. Source: CryptoQuant
 </figcaption>
</figure>
CryptoQuant’s Bitcoin bull-bear market cycle indicator is also approaching a critical level and could “switch to bear market if prices decline further.”
The chart below shows that the indicator is currently playing out in a similar way it did in March 2020, May 2021 and November 2021. A drop below the neutral line will mean that the market has switched to a bear phase, pointing to further declines. 
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-07/66397272-fa7b-4789-87a6-1fa3c70bea75.png" alt="Bitcoin price faces major ‘summer of 2021’ style correction despite BTC whale buying" title="">
 <figcaption style="text-align: center;">
 Bitcoin bull-bear market indicator. Source: CryptoQuant
 </figcaption>
</figure>
According to CryptoQuant, these two metrics show that Bitcoin is at “a level where a local bottom can form or a major ‘summer-of-2021’ style correction can occur.”
In addition, Tether’s (<a href="https://cointelegraph.com/tether-price-index">USDT</a>) market cap growth has stalled, suggesting that a rally might be hard to come by as historical recoveries can be attributed to a rise in stablecoin liquidity, CryptoQuant added. Growth in the market of USDT is often considered a key driver of bull markets.
<blockquote data-ct-non-breakable="true">
 “USDT market capitalization is still slowing down. Bitcoin price typically rallies as more liquidity enters the crypto market via USDT minting, a condition that has still not been met.”
</blockquote>
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-07/7860c03a-063e-4648-a747-0eeb6d6e6ac4.png" alt="Bitcoin price faces major ‘summer of 2021’ style correction despite BTC whale buying" title="">
 <figcaption style="text-align: center;">
 USDT market change vs. BTC price. Source: CryptoQuant
 </figcaption>
</figure>
Related: <a href="https://cointelegraph.com/news/price-analysis-7-10-btc-eth-bnb-sol-xrp-doge-ton-ada-avax-shib">Price analysis 7/10: BTC, ETH, BNB, SOL, XRP, DOGE, TON, ADA, AVAX, SHIB</a>
Meanwhile, Bitcoin whales have been aggressively accumulating as the recent downswing gave large holders an opportunity to <a href="https://cointelegraph.com/news/crypto-traders-tell-pesimissts-buy-the-dip-bitcoin">buy more on the dip</a>, boosting their stack by 6.3% over the past month, the fastest pace since April 2023.
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-07/a1273130-0026-4f0b-9dec-685757b55aec.png" alt="Bitcoin price faces major ‘summer of 2021’ style correction despite BTC whale buying" title="">
 <figcaption style="text-align: center;">
 Total Bitcoin holdings and monthly change. Source: CryptoQuant
 </figcaption>
</figure>
CryptoQuant said that this indicates “rising demand for Bitcoin” at lower levels. This is corroborated by <a href="https://x.com/FarsideUK/status/1809433132812173625" target="_blank" rel="noopener nofollow">increased</a> inflows into US-based spot Bitcoin exchange-traded funds (ETFs). 
Data from SoSo Value shows that despite BTC’s price drop to four-month lows on July 5, institutional investors poured $143.1 million into spot Bitcoin ETFs that day. This was followed by $294.9 million and $216.4 million net inflows on July 8 and July 9, respectively.
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-07/be69de4d-0646-42a7-a4a5-00a453d8f65d.png" alt="Bitcoin price faces major ‘summer of 2021’ style correction despite BTC whale buying" title="">
 <figcaption style="text-align: center;">
 Total spot Bitcoin ETF net flows. Source: SoSo Value
 </figcaption>
</figure>
This institutional support has counterbalanced the selling pressure while simultaneously demonstrating BTC’s acceptance within the financial mainstream.
From a technical perspective, Bitcoin’s short-term resistance rests at $59,000, embraced by the 200-day simple moving average, as <a href="https://x.com/intocryptoverse/status/1810885240870645969" target="_blank" rel="noopener nofollow">observed</a> by Benjamin Cowen, founder of the “Into The Cryptoverse” newsletter. 
Note that the price has been sealed below this level since breaching it on July 4, and bulls were required to flip it back into support to avoid further losses. 
<blockquote data-ct-non-breakable="true">
 “This is the 200D SMA and would also correspond to a backtest of the trend line that BTC broke down from.”
</blockquote>
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-07/29b020bd-8cee-42a2-be16-23cbdffdd79c.jpeg" alt="Bitcoin price faces major ‘summer of 2021’ style correction despite BTC whale buying" title="">
 <figcaption style="text-align: center;">
 BTC/USD daily chart. Source: Benjamin Cowen
 </figcaption>
</figure>
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin price faces major ‘summer of 2021’ style correction despite BTC whale buying

Cointelegraph

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