Bitcoin price crashed 5.55% between July 24 and 25, setting up a swing low of around $63,378. However, this downward move was undone in the New York session on Thursday, as BTC bounced nearly 5% and currently trades around $67,000. So, is the Bitcoin correction done? Why Is Bitcoin Price Correcting? The 23% correction of Bitcoin price between June 8 and July 5 can be attributed to the German government selling nearly 50,000 BTC. According to data intelligence platform Arkham, the wallet belonging to the German government now holds zero BTC. Despite the massive correction, Bitcoin price bounced back quickly, rallying 28% from the July 5 bottom of $53,329. As Bitcoin hovers around the $67,000 level, investors are wondering about the possibility of another BTC crash. Bitcoin Supply Overhang Fails To Deter Bulls, For Now Let’s analyze the BTC supply overhangs to assess whether the BTC price will correct more. From an investment or trading perspective, a supply overhang refers to a phenomenon when entities hold an excess supply of an asset that is available for sale but not actively being traded. Three BTC supply overhangs German Government’s BTC. Mt. Gox Creditors’ BTC. FTX Creditors’ $16 billion in cash and crypto tokens. German Government’s 50,000 BTC was one example of supply overhang. Mt. Gox wallet currently holds 80,000 BTC, down from 167,000 in March 2018, which is another major supply overhang that investors are actively concerned about. Mt. Gox Wallet Balance, Source: Arkham So far, the deposits to Mt. Gox creditors on Kraken and BitStamp have not triggered panic selling. Based on data from CryptoQuant, the BitStamp exchange has not seen a significant spike in spot trading volume. Additionally, the Kraken exchange has seen outflows, potentially suggesting that Mt. Gox investors are not looking to sell. If the Mt. Gox creditors remain bullish and refrain from selling, the Bitcoin supply overhang will unlikely prevent a significant correction. In addition, the FTX creditors will most likely receive roughly $16 billion in cash and crypto tokens by the end of 2024 or the first quarter of 2025. Many, including Anders Helseth and Vetle Lunde of K33 Research, suggest that this FTX’s BTC supply overhang is bullish. With these three significant Bitcoin supply overhangs removed, Bitcoin will likely trigger a push to a new all-time high (ATH). Read more: Mt Gox Bitcoin Creditors Face Withdrawal Restriction On Bitstamp BTC Bull Run Likely To Be Delayed Historical data shows that Bitcoin’s third quarter had the worst performance in the past 15 years, with an average return of 2.78%. But this metric should not deter investors, as the worst-performing months or quarters are often the best times to buy the dips. Bitcoin price monthly and quarterly performance Additionally, Charles Edwards, founder of the Capriole Fund, showcased that the ongoing consolidation of Bitcoin price below the 2021 ATH of $69,000 is by far the longest one. BTC has spent five months consolidating below this level, and if history is any indication, a breakout from the previous cycle highs has almost always resulted in exponential growth leading up to new ATHs. This is the longest Bitcoin has ever consolidated at a prior all time high. Clocking 5 months. It is also the only time we have hit the prior ATH during the dull summer months. Q3/Q4 will be big. pic.twitter.com/tj83idZ2Lx — Charles Edwards (@caprioleio) July 26, 2024 Based on this BTC price forecast, the correction might not be done yet, but the outlook remains bullish. Investors can expect BTC to consolidate or register a dip in August and September, followed by a continuation of the uptrend in the last quarter. The post Is Bitcoin Price Correction Done? appeared first on CoinGape.

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