Bitcoin Prices Retracing, but $140,000 Target in Sight

Bitcoin’s price may have dropped recently, but indicators suggest a compelling case for a robust recovery. Despite experiencing a decline of 1.4% over the last 24 hours, Bitcoin (BTC) is trading 6% below its all-time high of $109,000, reached on January 20, 2024. Fueled by substantial ETF inflows, increasing network activity, and notable whale accumulation, experts are eyeing a potential upward trajectory towards $140,000.

Spot Bitcoin ETF Inflows Mirror Past BTC Rallies

The recent drop in Bitcoin’s price comes amid a significant surge in investor interest, particularly for spot Bitcoin exchange-traded funds (ETFs). In just two weeks, these ETFs recorded net inflows of $2.9 billion, marking a strong appetite for Bitcoin-backed investments. Historical data shows that after the launch of US-based spot Bitcoin ETFs in January 2024, these products amassed about $8.5 billion in net inflows by mid-March, highlighting a pattern that often aligns with BTC price surges.

As further evidence, between November 6 and December 16, 2024, cumulative inflows reached $5.7 billion, coinciding with Bitcoin’s dramatic rise from $67,000 to $108,000 in the same timeframe. If this inflow trend persists, analysts predict Bitcoin could continue its upward movement towards new all-time highs.

Bitcoin Market Volatility Index: Risk-On

The influx into Bitcoin ETFs signals a rising risk-on sentiment, highlighted by the declining CBOE Volatility Index (VIX). This index, which measures market volatility expectations over a 30-day period, has fallen dramatically from 55 to just 18 within the last 25 trading days. A score below 18 typically signals a risk-on environment, favorable for assets like Bitcoin.

Timothy Peterson, a Bitcoin network economist, commented on this trend, stating, “This will be a ‘risk on’ environment for the foreseeable future.” His predictive model, known for its high accuracy, forecasts a target price of $135,000 over the next 100 days if current conditions persist.

Strong Bitcoin Accumulation Continues

Another bullish indicator is the behavior of Bitcoin whales, who have been steadily increasing their holdings despite the price fluctuations. The Bitcoin Accumulation Trend Score (ATS) is currently at 1, indicating significant buy-in from large investors. This trend mirrors the accumulation observed in October 2024, which preceded a surge following US President Donald Trump’s election victory.

According to data from Santiment, addresses holding between 10 BTC and 10,000 BTC accumulated an additional 83,105 Bitcoin over the past month. Santiment remarked, “With the aggressive accumulation from these large wallets, it may be a matter of time until Bitcoin’s coveted $110K all-time high level is breached.”

Declining Bitcoin Balance on Exchanges

Another trend adding to Bitcoin’s bullish narrative is the declining balance of BTC held on exchanges. As of May 15, 2024, exchange balances dropped to a six-year low of 2.44 million BTC, indicating that investors are moving their assets into self-custody wallets instead of selling. This behavior suggests a hold strategy as traders anticipate further price increases.

Increasing Network Activity

The potential for Bitcoin’s price rally is also supported by rising network activity. The transaction volume Z-score, which assesses current transaction levels against historical averages, has been climbing significantly. This metric moving above 1 typically indicates heightened market interest and activity, often leading to price rallies.

Ted Boydston, a prominent crypto investor, expressed optimism regarding this metric, stating, “This is a good sign for Bitcoin price acceleration. Bitcoin should be full bull once the Z-score breaches 1.”

BTC Rounded Bottom Pattern Targets $140K

From a technical analysis perspective, Bitcoin appears to be forming a rounded bottom pattern on its daily chart. Current bullish efforts are aimed at driving prices above the neckline of this formation at $106,660. A daily close above this level could confirm a breakout, setting a target price of $140,000—a potential 37% increase from current levels.

Additionally, the relative strength index (RSI) sits at 70, and bullish crossovers from moving averages (SMAs) indicate that market conditions are still favorable for an upward trajectory that could even surpass $140,000. As Cointelegraph previously reported, breaking out of a bull flag suggests a rally that could push BTC price closer to $150,000.

Conclusion

While Bitcoin’s price is currently retracing, multiple indicators—from substantial ETF inflows to increased accumulation and vibrant network activity—paint a picture of a robust market poised for recovery. With the potential for Bitcoin to reach new all-time highs, investors will be watching closely as these trends continue to unfold.

For more insights on the trends influencing Bitcoin’s market dynamics, see our articles on the impact of ETF inflows, recent network activity, and whale accumulation patterns.

Note: This article does not contain investment advice or recommendations. Every investment and trading decision involves risk, so readers should conduct their own research.