On July 18, the price of Bitcoin (BTC) fell below $30,000, which retail investors may not have expected given the developments of the past month, but does today’s downward move represent an imminent trend turn?
The data suggest that, in the long run, this is not the case.
On the positive side first, after about 10 attempts since April of this year, the bitcoin price is still trying to break through the $30,000 support level, but the price keeps finding buyers in the $28,000 to $25,000 range, buyers Seems to be treating it as an accumulation zone.
On-chain data from Glassnode’s Bitcoin Accumulation Trend Score supports this sentiment, and could be positive depending on how investors look at things, as investor behavior at the $30,000 BTC price mirrors that at $28,000 to $24,000 The same accumulation behavior seen in the dollar area and near the presumed $16,800 bottom.
According to glassnode, “Accumulation trend scores close to 1 indicate that overall larger entities (or large parts of the network) are accumulating, while values close to 0 indicate that they are spreading or not accumulating.”
Basically, buyers are heavy accumulators from November 2022 to December 2022, and from March 2023 to April 2023, when BTC recaptures $30,000, they are heavy accumulators, and this indicator shows that they It did the same in July, as BTC attempted to overcome the $30,000 resistance level, or received a boost from ETF and XRP SEC news.
Bitcoin is in a crab market
Current price action and derivatives market data suggest that Bitcoin is in a crab market, with prices remaining range-bound and consolidating for an extended period of time. As JLabs analyst JJ the Janitor pointed out last week, a strong break above the $32,000 level would catalyze a Luna Terra crash-era CME gap-fill.
From a Bitcoin weekly market structure standpoint, the $30,000 level is an important pivot point that served as support (and now resistance) during the last bull cycle, but a break above that level would essentially be a long-term Time frames higher highs and confirms a trend reversal with the next resistance near $37,000.
Trader activity in the derivatives market is another factor contributing to the current crab market. With less money and relatively quiet open interest, a meaningful spike in these metrics would inspire interest in the market, except for retail investors attempting to long the breakout and long a lower support retest, or short the breakout and liquidate in both cases. Confidence in rising prices. The brink of a massive breakout is not there yet.
Of course, the U.S. dollar index fell below 100 last week, but that may have more to do with investors’ reaction to the Fed’s aggressive measures against inflation, and the time frame is too tight to expect an immediate and massive reaction from BTC.
Price action in futures on the cryptocurrency exchange highlights bulls and bears trying to get ahead of a price breakout, but without much success in the short-term.
One metric to watch is total open interest, and if that metric falls sharply below its current range, then there could be some real bargain-hunting opportunities, said Gatekeeper JJ. Currently in an uptrend despite being sideways, it could also be interesting to see a surge in OI and could be driven by news, regulatory or legislative events.
related: Bitcoin falls below $30K as macro and regulatory concerns take center stage
While Bitcoin’s short-term price action may cause some concern among new investors and day traders, the on-chain perspective is still quite compelling.
this #bitcoin Long-term holder supply remains at an ATH of 14.5 million BTC. This suggests that sophisticated investors prefer to accumulate Bitcoin rather than distribute it. pic.twitter.com/VkY9uTAVGG
— glassnode (@glassnode) July 18, 2023
At the same time, the cumulative total address balance indicator also resumed its upward trend since March 16 when the BTC price reached $25,000.
Readers should also note that the metric also shows an increasing total balance of addresses accumulating since January 2022, when Bitcoin was priced at $47,800 per coin. What is clear is that at the height of the cryptocurrency market crash and Bitcoin price sell-off, multiple on-chain indicators show that investors continue to increase their allocation to Bitcoin.
This article does not contain investment advice or advice. Every investment and transaction involves risk, and readers should do their own research when making a decision.
Svlook
