The price of bitcoin is currently in an uncertain state. After BTC broke below the one-month trading range between $29.800 and $31.500, the bulls have so far failed to recapture this area. The first failed on Wednesday at $29.725, the second failed on Thursday at $29.600.
On the other hand, the bears are currently unable to push the price below the important $29,000 support. Which direction the next movement will head is wild speculation as always, but the data may be indicative.
Bullish Sign 1: Decrease in BTC Supply on Exchanges
Renowned crypto analyst Ali Martinez shared An interesting bullish chart shows that only 2.25 million BTC are currently held in known crypto exchange wallets. This is the lowest bitcoin supply on the trading platform since January 2018.
The data shows that investors and long-term holders are avoiding selling and are instead choosing to keep their BTC away from exchanges. This “hodling” behavior indicates positive sentiment among BTC holders.
Bullish Sign 2: Decrease in Flows from Bitcoin Whales
Julio Moreno, head of research at CryptoQuant, signaled another bullish run when he shared a chart showing the decrease in inflows of large investors holding 1,000 to 10,000 BTC (aka bitcoin whales) on exchanges. “We’re not really seeing bitcoin whales flow into exchanges,” Moreno said.
Additionally, the same trend has been observed among small investors as well, indicating a reluctance to deposit BTC in centralized exchanges. Commenting on the Exchange Deposit Transactions (7-day SMA) chart, Moreno said, “Really, it looks like nobody wants to deposit in centralized exchanges.”
Such behavior suggests that significant holders and institutions are holding on to their BTC assets, potentially anticipating further price increases in the future.
Bearish signal: short-term holders (STH) MVRV metric
Addressing the short-term holder (STH) MVRV metric, on-chain analyst Axel Adler Jr. said: “STH MVRV is actively falling and we could see something similar to the previous two corrections.” The chart shown by Adler shows that during the sharp bitcoin price correction between mid-March and mid-June, STH MVRV fell either near or below 0.
Currently, the STH MVRV is still somewhat elevated, so an eventual drop in bitcoin price from short-holder selling may be necessary to reset the MVRV to 0.
Adler also commented that at this time there is not enough flow on the futures exchanges as in March and June. Adler said, “Don’t expect a quick breakout to the top or bottom.”
BTC Binance Spot Liquidity Analysis
Analyst @52kskew shared a comprehensive analysis of BTC Binance Spot Liquidity, highlighting an interesting observation. The bid liquidity (bids > asks) and the spot are skewed towards the ask price due to low volatility. “Note the difference in volume from the previous sell-off and the current falling volume and the minimum drawdown,” he added.
Given the bid liquidity between $29,000 and $28,500, this area could be the point for buyers to step in if BTC experiences further downside. In a bullish scenario, there would be spot buying in this area, followed by rotation of shorts. New longs are opened and the price moves towards spot supply near $30,000. Skew says that in a sell scenario, spot bid liquidity tends to drive down the price and lead to forced selling.
Possible impact of economic data on bitcoin
Furthermore, it is important to keep an eye on macroeconomic factors that can affect the price of bitcoin. Of particular importance is the release of the Personal Consumption Expenditure (PCE) Price Index this morning at 8:30am EST.
During Wednesday’s FOMC press conference, Fed Chairman Jerome Powell stressed the importance of core inflation, which is proving difficult. Therefore, core PCE in particular needs to continue declining to ease the Fed’s inflationary concerns. If the expectation for core PCE of 4.2% is exceeded, bitcoin can be expected to react faster.
As of press time, the price of bitcoin was $29,210.
Featured Image from iStock, Chart from Tradingview.com
source: www.newsbtc.com
