Bitcoin investors are feeling deja vu as the setup for the next bull run takes shape

Bitcoin has been awash with good news in the last month, from the BlackRock Bitcoin ETF application to the SEC's first loss of a crypto enforcement case to the June inflation data. It still can't break above $31,000. For the third consecutive month, it barely moved either before or after CPI was released. Even though it gained 4% on Thursday after Ripple won a partial victory, it lost all those gains the next day and ended the week at just below the flat line. This is its third consecutive down week. Last week, the dollar index, which is usually inversely correlated with bitcoin, hit its lowest point in over a year, while bitcoin remained unchanged. Investor confidence has reached a new peak, but this is more than just an adrenaline rush. Many traders see similarities between the behavior of bitcoin today and the moves it made in the run-up to the previous halving when the coin was still recovering after the crypto crash of 2018. Andrew Lawrence, CEO and co-founder of custody firm Censo, said that in 2019, there were periods of strength followed by pullbacks. It wasn't until a year after the bitcoin halving, in spring 2020, did we see a sustained market rally. The same thing is happening again, and the halving next year will probably mark the start of the next rally. BTC.CM=1M mountain Bitcoin struggled to break through $31,000 in the last month. The halving occurs when the reward for bitcoin mining is halved, as specified in the Bitcoin code. This is done to reduce the supply. This event has historically occurred every four years, and it's set the stage for new bull markets. Next one expected in May 2024. Lawrence said that Bitcoin clearly bottomed out late last year and we are now in a phase of recovery and accumulation.
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Q3 volatility is on the rise The third quarter has historically been the weakest period for bitcoin. According to CoinGecko's data, the average gain for bitcoin in third quarters since 2014 is only 4.67%. It has had a positive third-quarter four times out of nine. Bitcoin is 95% away from its 2022 low, which was just below $16,000. It's still only two weeks into the month of July. Investors expect seasonal gains during the fourth quarter. Bitcoin has averaged a return of 93.38% since 2013. Market observers are predicting volatility but believe the trend is towards strength. Cantor Fitzgerald stated Friday that the SEC vs. Ripple case is a "bellwether" whose outcome "will be instrumental in shaping future U.S. cryptocurrency regulation" and will provide a tailwind to bitcoin's price. It added that the increased regulatory clarity it brings could increase the chances of a spot Bitcoin ETF being approved. Canaccord Genuity stated that the Ripple case gives industry hope that SEC will "take its foot off the enforcement pedal". Grayscale's lawsuit, which challenges the SEC's denial of Grayscale Bitcoin Trust's conversion to an ETF, is another important catalyst for investors to watch this summer. We wouldn't be shocked if crypto assets became more volatile in short-term due to weak liquidity and an uncertain macro-picture. However, any move to the downside is a good opportunity to buy crypto assets and stocks related to cryptos, according to Chase White, Compass Point analyst. Miners are putting pressure on the market to sell. With Bitcoin's halving, as well as a rise in price and activity, miners are racing for more computational power (also known as hashrate) to run their operations. They've sold their bitcoins to fund operations.
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It's often the best way to raise cash, as equity prices are low and interest rates are high. According to Glassnode last week, the selling volume of miners reached its highest level since march 2019 and bitcoin's rate hash hit an all-time peak. Yuya Hasegawa is a crypto market analyst for Bitbank, a Japanese bitcoin exchange. She said that bitcoin miners were the main suspects in limiting bitcoin's potential upside. They have been sending bitcoins to exchanges with an unprecedented rate since May. The mining difficulty of bitcoin has reached a record high this week. This makes it harder and potentially less profitable for miners to mine bitcoin. The profitability of miners depends on the difficulty level at which bitcoin is mined. This is controlled by an algorithm on the network. Hasegawa said that the miners' pressure to sell will continue until the next difficulty adjustment in two weeks.