As of midday Tuesday, bitcoin was clinging to the psychologically important $110,000 level following a drop of more than 2% over the prior seven trading days — one that materialized as rival ether raced to record highs, potentially signaling a cryptocurrency rotation.
While there’s no denying bitcoin is retreating, that pullback doesn’t mean investors should abandon the largest digital currency. In fact, some signs could be pointing to a near-term rebound. That could potentially signal a buying opportunity is afoot with bitcoin itself and funds such as the CoinShares Valkyrie Bitcoin Fund (BRRR).
As a spot bitcoin ETF, BRRR has recently followed bitcoin to the downside, but that price action isn’t surprising because, historically, August is the worst month of the year for bitcoin. So with this month drawing to a close, a seasonal rebound could be afoot for bitcoin, but there’s more to the story.
Why Bitcoin Can Bounce Back
Seasonal trends are interesting and make for compelling talking points. And when the security in question lives up to historical billing, as bitcoin did this month, seasonality becomes all the more intriguing. Fortunately for HOLDers and investors considering BRRR, there are other credible reasons to believe the largest cryptocurrency can bounce back over the near term.
For example, when bitcoin recently breached the $110,000 level to the downside, more than $700 million worth of crypto liquidations were triggered, according to data from CoinGlass, intensifying selling pressure. The cryptocurrency’s ability to rebound off the post-liquidation lows could prove to be an encouraging sign for those holding bullish positions.
Some traders believe as much, noting that while it’s possible that bitcoin could retest the $106,000 to $108,000 area over the near term, a bottom could be forming right now and the digital currency’s ability to hold the $110,000 level could be instructive for those willing to wager on more upside into year-end. There are also good vibes emerging courtesy of the Coinbase Premium Index, which inched back into the green on Tuesday, Aug. 26.
“The Index measures the difference in BTC prices between the Coinbase BTC/USD and Binance BTC/USDT pairs, and when green, it implies strengthening US market demand,” reported William Suberg for CoinTelegraph.
BitBull, a noted crypto trader, confirmed the efficacy of the Coinbase Premium Index, noting in a recent thread on X that the index showed some resilience at the tail end of the aforementioned liquidations, indicating the worst of the selling could be over and a short-term rally could materialize. That could be a boon for BRRR investors.
For more news, information, and strategy, visit the CoinShares Crypto ETF Hub.
