Bitcoin has reclaimed the current range’s highs. At the time of writing, the first cryptocurrency by market size is trading at $41,300, with a daily profit of 6% and 23.8 percent.
After retaking $40,000 on the daily chart, BTC is going sideways.
The fear and greed index has signaled greed for the first time in months, indicating that market sentiment has shifted bullish. Other evidence, as many experts have pointed out, leads to a clear market shift. In the next weeks, the bulls may experience more green days.
According to Glassnode data released by Moskovski Capital’s CIO Lex Moskovski, the quantity of Bitcoin held by “strongest holders” has increased. These holders have increased to an all-time high, according to the Illiquid Supply metric, implying “bullish” price action.
Long-term Bitcoin holders have increased, according to Charles Edwards, a founder of Capriole Investments. Since the May 2021 crisis, these types of investors have been increasing their supply, according to the HOLD Waves measure. Edwards continued, ”
This kind of rapid rise has never occurred in the early phases of previous bear markets, implying that the Bitcoin bull-cycle may still be intact.
According to Edwards’ research, exchange platforms have seen their “first positive inflows” since last week, when Bitcoin soared from its yearly low of about $29,000 to its current levels. This statistic indicates that crypto market demand may be returning, which could support further appreciation.
As previously indicated, Bitcoin dropped from around $35,000 to its annual open just days before the current price movement. This was a “failed breakout,” according to Edwards, because sellers were fatigued at such lows and couldn’t push the price any lower. He continued, “
A massively short market, with over-exposure to stable-coin contracts, aided the subsequent upside squeeze. Over the last week, this resulted in a short squeeze, which culminated on the candle highlighted (…)
The Fundamentals of Bitcoin Have Turned Positive, and the Bulls Have Regained Control?
Edwards looked at other metrics, such as the Hash Ribbons measure, and thinks it’s “promising.” After China stopped Bitcoin mining, the measure experienced a significant drop. Miners were forced to relocate to more hospitable environments.
The hash rate of Bitcoin has been increasing, as has its Energy Value. Edwards discovered that both of these metrics increased by roughly 8%, indicating that the miners’ exodus had come to a halt. Another bullish argument is that since these entities can no longer sell BTC, the market may face less selling pressure. Investors, on the other hand, must exercise caution:
The hash rate is on a strong upward trend, similar to December 2018, indicating that the bottom may be near. During capitulation, however, Hash Rate can produce a variety of false positives. This is why we are waiting for confirmation of the Hash Ribbon purchase signal.
Bitcoin may see additional accumulation around its present levels in the next few days, with a “greater likelihood” of another move up to the mid-range, $45,000. The invalidation zone for BTC is $39,000 if it retraces.
The macroeconomic prognosis for Bitcoin is both a possible tailwind and a concern. According to Edwards, the Federal Reserve of the United States and its inflationary monetary strategy could continue to promote BTC if the financial institution continues to produce money.
In the traditional market, there is the possibility of a risk. Bitcoin might crash if the stock market does. The cryptocurrency has a good correlation with the S&P 500 index. As a result, in the event of a dip, it may impair its chances of reclaiming earlier highs. Edwards came at this conclusion:
Fundamentals and technicals are now tilted to the upside, and our basic assumption is that prices will rise to the mid-to high-$40,000s in the next weeks. If we break below $39K in the short term, this thesis will be confirmed. Finally, unless conditions improve more, we should be mindful of considerable volatility and negative risk, according to Bitcoin cycle history.