Bitcoin Tests $65K Again Following August Market Drop

August began with Bitcoin's price plummeting to a three-month low of $49,111 on August 5, triggering over $500 million in liquidations across crypto markets.

Bitcoin price approached the $65,000 threshold on Monday, August 26, recording a 5 percent increase in just four days. This latest price increase coincides with optimism among BTC investors, especially as speculation mounts that the US Federal Reserve may cut interest rates in September 2024.

Bitcoin Tests $65K Again After August Market Drop

August began with the Bitcoin price falling to a three-month low of $49,111 on August 5, causing liquidations of over $500 million in crypto markets. However, as the month progressed, market sentiment changed. In the second half of August, major cryptocurrencies such as Bitcoin, Ethereum and XRP recorded double-digit gains.

Bitcoin Price Analysis chart shows how bullish investors took control of BTC markets in late August. The Bitcoin price rose 15.8 percent in ten days, rising from $56,150 on August 15 to nearly $65,000 on August 25. The bears managed to halt the bulls' rally and prevent a breakout above $65,000, but Bitcoin fell 5 percent from its recent peak to $62,000 on August 27.

However, beyond this short-term price movement, on-chain data trends suggest that Bitcoin may be poised for continued growth and the recent correction appears temporary.

Investors Transfer $5 Billion BTC to Cold Wallets

Over the last 30 days, Bitcoin investors have increasingly chosen to move their assets into long-term storage. This shift likely anticipates long-term gains, particularly a potential interest rate cut by the US Federal Reserve in September 2024.

The Bitcoin Exchange Reserves metric, which measures the total amount of BTC on exchanges, dropped from 2,759,823 BTC on July 25 to 2,677,614 BTC on August 25.

This shows that 82,209 BTC worth approximately $5 billion was transferred to cold wallets.

This significant decline in exchange reserves indicates that a large number of investors are withdrawing Bitcoin from short-term market circulation, reducing selling pressure. Historically, such declines in exchange reserves have preceded bullish trends in Bitcoin price as investors prepare for long-term gains.

This trend shows that investors are preparing for a price increase instead of selling their BTC, especially if the Fed moves forward with the expected interest rate cut.

Bitcoin Price Prediction: Bulls Aim for Breakout of $70K

According to current technical indicators, Bitcoin price may soon test the $70,000 level. The BTCUSD Price Analysis chart below shows the price approaching the upper band of the Keltner Channel, which is a bullish signal that generally indicates further upside.

Recent price movements suggest that $66,000 is the next critical resistance level.

If Bitcoin breaks this level, $70,000 could quickly become the next target. On the other hand, on the downside, $61,000 is a critical support level and if it breaks, it could retest the $56,000 range.

With on-chain data supporting the bull narrative and technical indicators pointing to continued upward momentum, Bitcoin looks well-positioned to reach new highs as we head into September. $66,000 as investors indicate the next bull phase may be starting

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