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Crypto Market Stuck In A Rut? Here’s Why 2024 Bitcoin Breakout May Be Delayed

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The crypto market has been struggling with prolonged sideways movement in recent months. Since March 2024, the market has failed to make a successful breakout above previous peaks, leaving investors frustrated.

According to a recent report by CryptoQuant analyst Crypto Dan, this continuous pattern of stagnation leads many to wonder when the market might see a significant rebound. While there are some short-term factors that may provide relief, the overall sentiment in the crypto space remains cautious.

Is The Crypto Market Stuck?

One key observation made by Crypto Dan is the emergence of a “Dead Cross” on the short-term and long-term SOPR (Spent Output Profit Ratio) moving averages.

This is a bearish signal in technical analysis, indicating that selling pressure is likely to outweigh buying pressure. It suggests that traders may be locking in profits rather than betting on further gains.

The persistence of this trend as highlighted by Dan raises questions about whether a meaningful recovery is on the horizon, or if the market is headed for a longer period of consolidation.

Looking ahead, one potential catalyst Dan pointed out for the market movement is the upcoming US Federal Reserve meeting on September 18, where a base rate cut is anticipated. Historically, rate cuts have tended to inject positive sentiment into financial markets, including cryptocurrencies.

A reduction in interest rates could result in an influx of liquidity into riskier assets like Bitcoin and altcoins, as investors seek higher returns. This could trigger a short-term rally, offering some relief from the stagnation observed in recent months.

However, Dan warns that while a short-term rebound might occur, it may not lead to a sustained bullish trend unless there is a significant shift in market conditions.

When Will A Breakout Finally Happen?

The fundamental outlook for the crypto space remains mixed, with macroeconomic factors such as inflation and recession concerns still weighing heavily on investor sentiment. If these factors do not improve, Dan noted that it is likely that frustrating, low-volatility movements could persist well into 2024.

In his words:

Due to the expected US base rate cut on September 18, a short-term rebound due to positive market sentiment can be expected, but if the market atmosphere is not significantly reversed, it is highly likely that frustrating movements will continue in 2024.

Although actively monitoring the crypto market at this current state may feel discouraging. However, Crypto Dan emphasizes that “patience” will be key for long-term investors.

According to Dan, while the potential for a short-term rally exists, broader market trends suggest that a more meaningful and sustained uptrend may not occur until 2025.

Featured image created with DALL-E, Chart from TradingView


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