After briefly touching $112,200, Bitcoin (BTC) has made a slight comeback and is currently hovering around $116,300. While the struggle to overcome the $120,000 resistance point persists, on-chain analytics hint that the asset might be consolidating, potentially setting the stage for a fresh push towards a new record peak.
Analyst: Bitcoin May Be Building Momentum Through Accumulation
A recent CryptoQuant analysis by BorisVest suggests that employing a “Smart Dollar-Cost Averaging” (DCA) approach could be beneficial for Bitcoin investors, allowing for more strategic accumulation and improved long-term results.
BorisVest’s research indicates that many investors find it challenging to pinpoint optimal entry points for BTC. Often, purchases occur at local market tops due to “fear of missing out” (FOMO), while market dips are avoided due to concerns about further price declines.
Smart DCA presents a solution to these emotionally driven decisions. The strategy advises accumulating BTC when its price dips below the average price seen in the past week to month. This timeframe often sees short-term holders experiencing losses, which leads to increased selling pressure. BorisVest elaborated:
During these periods, short-term holders are generally in the red, resulting in higher selling volume. Smart DCA triggers automated, frequent purchases to narrow the gap between the cost basis in BTC and USD.
At present, the average price over the past week to month is roughly $117,700. As long as Bitcoin’s price stays below this benchmark, Smart DCA signals an accumulation opportunity. Conversely, if Bitcoin surpasses this level, the strategy recommends gradually selling previously acquired coins.
Given Bitcoin’s current price around $116,000, the analyst believes it’s still within an accumulation range, though nearing the key average price threshold. CoinGecko data indicates that BTC remains about 5.2% below its all-time high of $122,838, reached on July 14th.
Is a New Bitcoin High Imminent, or Unlikely?
Despite Bitcoin’s relative stability near $115,000, certain analysts caution that its average price is showing early indications of weakness. A decline below $105,000 could amplify downward pressure, potentially leading to a more significant sell-off.
Notably, Binance’s net taker buy/sell volume has slipped back into negative figures, raising concerns about a possible short-term market correction. Furthermore, increased outflows from Bitcoin ETFs have demonstrated underlying market fragility, contributing to the overall uncertainty.
However, not all signals point to a downturn. Some on-chain metrics suggest that BTC might simply be experiencing a period of consolidation following a brief period of overheating. As of this update, Bitcoin is trading at $116,316, reflecting a 2.1% increase over the last 24 hours.
