Bitcoin (BTC) may soon enter an exciting phase called the “Banana Zone,” where its price could surge. However, crypto analysts believe that three key trends need to reverse first.
In a June 18 post, Julien Bittel, the head of research at Global Macro Investor (GMI), referred to the “Boring Zone” before the “Banana Zone.” The Banana Zone is a term coined by GMI founder Raoul Pal to describe a period of significant upward price movement.
However, according to an analyst from CryptoQuant, sustainable recovery depends on three critical indicators changing their course.
Firstly, Bitcoin miner selling needs to decrease. Since mining revenue dropped by 55%, miners have seen a significant decline in revenue since Bitcoin’s all-time high of $73,679 in March. Data from Blockchain.com shows that daily revenue earned from block rewards and transaction fees has decreased by approximately 56% to $34.26 million as of June 12.
Secondly, there is a need for an increase in stablecoin inflows. The absence of new issuances in the stablecoin market decreases liquidity and affects price volatility. CryptoQuant data reveals that stablecoins held in crypto exchange reserves have decreased by almost 10% in two months, currently standing at $21.96 billion.
Lastly, outflows from Bitcoin exchange-traded funds (ETFs), such as those from Fidelity and Grayscale Investments, need to decrease. These outflows create selling pressure for Bitcoin. On June 18, Fidelity Bitcoin Wise Origin Bitcoin Fund (FBTC) and Grayscale Bitcoin Trust ETF (GBTC) had outflows of $83.1 million and $62.3 million, respectively, according to Farside data.
Bitcoin is currently trading at $64,966, down 2.35% over the past 30 days. It is down 12% from its all-time high in March. Altcoins like Solana (SOL), Dogecoin (DOGE), and Shiba Inu (SHIB) have experienced even greater declines in the last week.
While Bitcoin is in a period of sideways movement, traders anticipate a directional shift in the near future. Breaking the downtrend line could initiate a price reversal, according to pseudonymous crypto trader Rekt Capital.
It’s important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research before making any investment decisions.