Bitcoin paints a conflicted picture as August draws to a close, with the flagship cryptocurrency slipping back below $61,000 after a fleeting touch of that level on Thursday. The pullback comes amid a broader market that can’t quite decide which direction it wants to commit to — but under the surface, a more bullish narrative is quietly taking shape.
On-chain data reveals that Bitcoin supply on centralized exchanges has plummeted to a fresh 2024 low, a signal that investors are pulling their coins into cold storage at an accelerating pace. Meanwhile, some of the most respected names in crypto analysis are telling anyone who will listen: this is the time to re-accumulate.
TL;DR
- Bitcoin briefly reclaimed $61,000 on August 29 before falling back below the level on Friday, continuing its choppy end-of-month price action
- Exchange supply of BTC hits a new 2024 low as investors move coins to self-custody — a historically bullish signal
- Legendary trader Peter Brandt shifts his outlook on Bitcoin, forecasting a potential surge ahead
- Bitcoin shorts reach their most extreme level since the 2024 cycle bottom, suggesting a possible squeeze
- Analysts recommend re-accumulation despite the current cycle underperforming prior halving cycles
Bitcoin Struggles at $61K Resistance
Bitcoin’s price action in the final days of August tells the story of a market searching for conviction. After briefly pushing above $61,000 on Thursday, August 29, BTC surrendered those gains and slipped back below the psychologically important threshold on Friday. The rejection at $61,000 underscores the persistent selling pressure that has capped Bitcoin’s upside throughout much of August, a month that has tested the patience of bulls and emboldened short sellers looking for further downside.
The choppy trading mirrors a broader crypto market that remains indecisive. Altcoins have largely followed Bitcoin’s lead, with the total cryptocurrency market capitalization fluctuating without establishing a clear directional trend. For traders watching the charts, the $59,000 to $61,000 range has become the battleground, with neither bulls nor bears managing a decisive breakout.
Exchange Supply Plummets to New 2024 Low
Perhaps the most significant development flying under the radar of casual price-watchers is the relentless drain of Bitcoin from exchanges. On-chain data shows the amount of BTC sitting on centralized trading platforms has dropped to its lowest level in 2024, a trend that historically precedes major supply squeezes and subsequent price rallies.
When investors withdraw Bitcoin from exchanges, it typically signals a long-term holding intention rather than a desire to trade in the near term. This “illiquid supply” growth means fewer coins are readily available for sale, which — should demand increase — creates the conditions for a sharp upward move. The pattern has repeated itself multiple times throughout Bitcoin’s history, most notably before the 2020-2021 bull run that took BTC from $10,000 to $69,000.
Peter Brandt Turns Bullish
In a notable shift that has caught the attention of the crypto community, veteran commodity trader Peter Brandt has revised his outlook on Bitcoin, indicating he now sees potential for a significant upward move. Brandt, whose chart analysis has been followed by traders for decades and who has not always been bullish on Bitcoin, adjusting his stance carries weight among market participants.
Brandt’s updated view aligns with a broader theme: despite the current cycle’s underperformance relative to previous halving cycles — as highlighted by Galaxy Digital’s head of research Alex Thorn, who noted that the 2024 BTC cycle is “dramatically” weaker than the three prior cycles — the structural setup for an eventual breakout continues to strengthen. The argument is that compressed price action and reduced exchange supply create a coiled-spring effect.
Extreme Short Positioning Hints at Squeeze
Adding fuel to the bullish case, data shows that Bitcoin short positions have reached their most extreme level since the 2024 cycle bottom. When short interest climbs to such elevated levels, it sets the stage for a potential short squeeze — a scenario where a rising price forces short sellers to buy back in, amplifying the upward momentum in a self-reinforcing cycle.
This kind of crowded short trade has preceded some of Bitcoin’s most violent upside moves. The extreme positioning suggests that the market has become heavily one-sided in its bearish bets, which paradoxically increases the risk of a sharp reversal. For contrarian traders, the data point is flashing a warning sign to the bears.
El Salvador’s Bitcoin Bet Pays Off
El Salvador’s President Nayib Bukele took to social media this week to disclose that the nation’s Bitcoin holdings have turned profitable, showcasing the financial inclusion benefits and potential gains that motivated the country’s controversial 2021 decision to adopt BTC as legal tender. The announcement serves as a real-world counterpoint to the skeptics who predicted El Salvador’s Bitcoin experiment would end in financial ruin.
Bukele highlighted that beyond direct portfolio gains, Bitcoin adoption has driven increased financial inclusion for El Salvador’s unbanked population and attracted international attention and investment to the Central American nation. The disclosure comes as other countries and institutions continue to study El Salvador’s model as a potential blueprint for sovereign Bitcoin adoption.
Why This Matters
August 2024 may go down as one of those months where the price action told one story but the underlying data told another. While Bitcoin’s inability to hold $61,000 frustrates traders in the short term, the collapsing exchange supply, extreme short positioning, and bullish calls from seasoned analysts like Peter Brandt paint a picture of a market quietly building the foundation for its next major move.
The contrast between the current cycle’s modest performance — lagging behind previous halving cycles — and the strengthening structural indicators creates a fascinating tension. On one hand, the muted price action suggests the market lacks the explosive demand seen in 2017 or 2021. On the other, the flight into self-custody and extreme bearish positioning hint that when the breakout does come, it could catch many participants off guard.
For long-term Bitcoin holders, the message from the data is straightforward: the supply is tightening, the shorts are crowded, and the analysts who’ve called these moments correctly before are paying attention. Whether September delivers the move remains to be seen, but the pieces are being set on the board.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always do your own research and consult a qualified financial advisor before making investment decisions. Past performance is not indicative of future results.
exchange supply hitting 2024 lows while price chops around 61K is the most bullish divergence nobody talks about. coins are leaving exchanges and not coming back
Peter Brandt flipping bullish is either the best confirmation signal or the ultimate contrarian indicator. guy has been wrong plenty of times
shorts at their most extreme since the cycle bottom sounds like a squeeze setup. everyone and their mother is bearish at 61K, usually means the pain trade is up
re-accumulation advice is easy to give when you are not the one watching your portfolio bleed 8% in a month. the data is bullish but the psychology is brutal