Can Bitcoin rally? Analysts point to 3 critical market conditions

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Bitcoin's small retail traders dominate the market hitting a seven-month high. Analysts suggested three conditions for an ATH.

, the largest cryptocurrency by market capitalization, has been on a downward trajectory over the past month. On its price charts, BTC has declined by 1.01% on daily charts to trade at $56657.Since hitting an ATH of $73737 in March 2024, the crypto has struggled to maintain an upward momentum thus even hitting a local low of $49k.

In the analysis, wallets holding <1 BTC have now increased their holding to the highest levels in seven months. This means that small retail traders are holding the larger share of the BTC supply.However, according to this analogy, increased holding by small traders is not good enough for a rally. Based on this analysis, the first condition for BTC to rally is small holders reducing their holdings.

Thus, for a sustained rally, fewer small holders are less preferable because they are prone to panic selling. Therefore, whales accumulating BTC suggesting they are confident in a longer-term price increase through reducing liquidity on exchanges, which usually supports price appreciation.As noted by Santiment, small retail holders have continued to dominate the market in the recent past.For starter’s, Bitcoin’s ownership by historical concentration indicated that retail traders holders held 88.24%, which are 17.44 million Bitcoins, while investors hold 10.5% and whales 1.26%.

 

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