Bitcoin (BTC) may soon enter a highly anticipated "Banana Zone," a term coined by Global Macro Investor (GMI) founder Raoul Pal to describe a phase of substantial price increase. This optimistic forecast follows a series of analyses indicating that Bitcoin must first reverse three critical trends to achieve a sustainable recovery.
Julien Bittel, head of research at GMI, highlighted the current stagnation as "The Boring Zone," a prelude to the expected Banana Zone. According to CryptoQuant analyst IT Tech, a reduction in Bitcoin miner selling pressure is essential. Since Bitcoin's all-time high in March, miner revenue has plummeted by 55%, necessitating a decrease in miner sell-offs to stabilize the market.
Another crucial factor is the need for increased stablecoin inflows. The stablecoin market has seen a significant decline in new issuances, reducing liquidity and increasing price volatility. CryptoQuant data reveals a nearly 10% drop in stablecoins held in exchange reserves over the past two months, currently standing at $21.96 billion.
Furthermore, Bitcoin exchange-traded funds (ETFs) must see a reduction in outflows. Recent data from Farside indicates substantial outflows from Fidelity and Grayscale's Bitcoin ETFs, amounting to $83.1 million and $62.3 million, respectively. This selling pressure is a significant obstacle to Bitcoin's price recovery.
Currently, Bitcoin is trading at $64,966, down 2.35% over the past 30 days and 12% below its all-time high of $73,679 in March. Despite this, IT Tech suggests that this could represent a market bottom, paving the way for a potential rally if the identified trends reverse.
Altcoins have experienced more severe declines recently, with Solana (SOL), Dogecoin (DOGE), and Shiba Inu (SHIB) seeing seven-day losses of 8.23%, 11.67%, and 16.31%, respectively. Julien Bittel noted that Bitcoin's lack of significant movement indicates a "sideways chop" period, with other traders predicting an imminent directional shift.
Rekt Capital, a well-known crypto trader, emphasized the importance of breaking the current downtrend line to initiate a price reversal. If Bitcoin succeeds, it could lead to the long-awaited entry into the Banana Zone, promising substantial gains for investors.
As the market watches these key metrics closely, the potential for a significant Bitcoin surge remains high, contingent on favorable shifts in miner activity, stablecoin inflows, and ETF outflows.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
