Bitcoin (BTC) Is Oversold and Poised for a Price Rebound, ARK Invest Believes

After surviving a torrid start to Q3 2024, asset manager ARK Invest believes that Bitcoin (BTC) is prime for a price rebound in the near term.

Asset manager ARK Invest has observed a prime setup for a Bitcoin (BTC) price rebound in the short term, as indicated by oversold conditions and sustained inflows into Bitcoin spot exchange-traded funds (ETFs).

According to a July 18 report by the investment firm, Bitcoin appears “oversold” following a series of sell-off reports. The dominoes began to fall when Germany announced the sale of 50,000 BTC from its holdings, driving the asset’s price down to the $55,000 range.

The news of the large-scale sale prompted investors to book short-term profits, as traders anticipated further price dips. Reports of Mt. Gox repaying BTC to its creditors also contributed to the decline in asset value, with several analysts predicting a mass sell-off by the recipients.

However, ARK Invest highlights an upside to the streak of capitulation, noting that the reduction in difficulty could trigger a boon for remaining miners.

“Based on short-term-holder realized profits/losses and miner outflows, Bitcoin appears oversold,” the report reads. “Current levels of miner outflows suggest that miners are capitulating, a harbinger of a bullish reversal.”

Bitcoin’s sell-off began in Q3 2024 after Germany announced the sale of a portion of its BTC holdings to cover operational costs. The move follows a decision by the country’s central bank to sell off digital assets in its holdings.

The sale, which was reported by local news agency Handelsblatt, saw Germany generate roughly $2.7 billion from the sale of 50,000 BTC. The report adds that the remaining digital assets in the Bundesbank’s custody will be sold in the coming months.

The report highlights Germany’s decision to sell off BTC as a sign of the asset being oversold in the short term. The large-scale sale by a government entity, coupled with the recent sell-off, could lead to a buying opportunity emerging in the coming days or weeks, according to the report.

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