Following a minor correction last week and some early-week uncertainty, Bitcoin (BTC) has continued its bullish trends. Uncertainty arose as market participants awaited inflation statistics that turned out to be lower than predicted.
As a result of the reduced inflation numbers, investor confidence was boosted. Many people were more bullish as a result. As of this writing, Bitcoin has risen above $24,000, a gain of roughly 6.9% in the last three days. In the meanwhile, the price activity over the last two weeks can provide insight into potential future shifts.
Similarly, the rising channel that Bitcoin’s price has been following has kept it contained within a resistance and support level. If BTC’s price stays in that range, it may continue to rise until it reaches the $25,000–26,000 price zone, where it may reverse course.
Can We Expect a Breakthrough?
Warning for Bitcoin investors: the MACD shows a significant slowing of bullish momentum compared to previous rallies inside the same range, especially during July sessions. Yet, during the past two weeks, there have been consistent increases in the number of BTC held by addresses that store more than one BTC. If Bitcoin (BTC) continues to gain at this rate, there may be enough momentum for a breakout to occur.
However, as Bitcoin (BTC) approaches a key resistance level, the volume of addressed purchases may slow. The index of holdings in the Purpose BTC ETF represents yet another important metric. Investors have been buying this ETF on price increases and selling in large quantities when the price drops. Thus, it significantly affects market movements.
For example, on August 10, 2018, there was a 3% increase from August 9, 2018, when the index was at 24,898 $BTC, to August 10, 2018, when it was at 26,079. This was consistent with the bullish trends seen in Bitcoin during this time. Meanwhile, when the BTC price approaches the resistance level, it is possible that this indicator will experience outflows. That assumes the market will become more bearish.
In addition, large-scale accumulation has bolstered BTC’s recent rise. According to Santiment’s data, the Bitcoin age consumption metric verified the trading of almost 12.05 million BTCs. However, the high MVRV ratio was a direct result of the upswing, and the increased number of happy investors portended further losses.
There is a chance that Bitcoin will undergo yet another correction after it retests the next resistance level. In spite of this, traders should be wary because the Moving Average Convergence Divergence indicates the current trend may not hold. Time, however, will show all.
In light of the foregoing, what do you think? Observe the space below for comments.