Bitcoin (BTC) may be on the verge of entering an exciting phase known as the “Banana Zone,” where its price could experience a significant surge. However, analysts believe that there are three key trends that need to reverse before this can happen.
Describing the current state as “The Boring Zone” before potentially entering the “Banana Zone,” Global Macro Investor’s head of research, Julien Bittel, explained the concept in a recent post.
The term “Banana Zone” was coined by Raoul Pal, the founder of GMI, to signify a period of substantial upward price movement. Yet, according to an analyst from CryptoQuant, a sustainable recovery will depend on three critical indicators changing course.
Firstly, there is a need for a reduction in Bitcoin miner selling, as mining revenue has taken a significant hit, dropping by 55%. Since reaching its all-time high of $73,679 in March, Bitcoin miners have witnessed a sharp decline in daily revenue earned from block rewards and transaction fees.
Additionally, there is a call for an increase in stablecoin inflows to address the lack of new issuances in the stablecoin market, which impacts liquidity and price volatility. Furthermore, outflows from Bitcoin exchange-traded funds (ETFs) need to decrease to alleviate selling pressure on Bitcoin.
Traders are closely watching these indicators as Bitcoin currently trades at $64,966, down 2.35% over the past month. Altcoins like Solana (SOL), Dogecoin (DOGE), and Shiba Inu (SHIB) have experienced even steeper declines in the last week.
While Bitcoin has been in a period of sideways movement, traders are anticipating a potential price reversal. Rekt Capital, a pseudonymous crypto trader, highlighted the significance of breaking the downtrend line for Bitcoin to initiate a turnaround.
It is essential to note that this article does not provide investment advice, and individuals should conduct their own research before making any financial decisions.