Bitcoin has resumed the highs of its current range. The first cryptocurrency by market capitalization is trading at $ 41,300 at the time of writing, up 6% and 23.8% on the daily chart.
BTC is moving sideways after recapturing $ 40,000 on the daily chart. Source: BTCUSD Tradingview
The general mood on the market has become bullish, and the fear and greed index is signaling greed for the first time in months. Other indicators, as many experts have pointed out, suggest a definite shift in the market. The cops could see more green days in the coming weeks.
Data from Glassnode, provided by the CIO of Moskovski Capital Lex Moskovski, showed an increase in “strongest holders” bitcoin holdings. According to the illiquid supply metric, these holders have risen to an all-time high, indicating “bullish” price action.
Source: Glassnode via Lex Moskovski
Charles Edwards, a founder of Capriole Investments, announced an increase in long-term Bitcoin holders. According to the HOLD Waves metric, these types of investors have increased their supply since the May 2021 crash. Edwards added:
This type of sharp spike never occurred in the early stages of previous bear markets, suggesting that the Bitcoin bull cycle may still be intact.
Source: Glassnode via Charles Edwards
Additional data provided by Edwards suggests that exchange platforms had their “first positive outflows” since last week, when Bitcoin climbed from its annual opening at around $ 29,000 to its current level. This metric suggests that demand in the crypto market could return and support further appreciation.
As mentioned, days before the current price action, Bitcoin fell from around $ 35,000 to its annual opening. Edwards called this price action a “failed breakout” because at these lows the sellers were exhausted and unable to push the price any further. He added:
The subsequent upward pressure was aided by a strong short market with excessive exposure to stable coin contracts. This led to a short squeeze in the last week that culminated in the highlighted candle (…)
Source: Charles Edwards – Capriole Investments
Bitcoin fundamentals turn positive, bulls back under control?
Edwards checked other indicators like the Hash Ribbons metric and believes it looks “promising.” The metric saw a sharp decline after China banned bitcoin mining out of the country. Miners have had to migrate to friendlier destinations.
The bitcoin hash rate and its energy value have increased. Edwards noted that both metrics were up about 8%, suggesting the miners’ migration has ended. Another bullish factor as these companies may stop selling BTC; the market could see the selling pressure easing. However, investors need to be careful:
The hash rate shows a positive and strong trend, not dissimilar to December 2018, suggesting that the bottom may have bottomed out. However, the hash rate can produce various false positives during surrender. For this reason we remain cautious until the hash ribbon buy signal is confirmed.
In the coming days, Bitcoin could see further accumulation around its current level with a “higher chance” of another leg up to the mid-range of $ 45,000. If the price of BTC is tracked, the devaluation zone is $ 39,000.
The macroeconomic outlook presents a potential tailwind and risk to Bitcoin. Edwards claims that the US Federal Reserve and its inflationary monetary policy could further boost BTC if the financial institution continues to print money.
There is a potential risk in the traditional market. If the stock market crashes, Bitcoin could follow. The cryptocurrency has a high correlation with the S&P 500. As a result, it could affect its chances of recapturing previous highs in the event of a decline. Edwards concluded:
Right now the fundamentals and technicals are on the upside and our baseline scenario is that we will be moving towards the mid to high $ 40,000 in the coming weeks. In the short term, this thesis would be validated if we collapse below $ 39,000. Finally, the history of the Bitcoin cycle tells us that we should be wary of significant volatility and downside risk until conditions continue to improve.
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