Bitcoin has resumed its affinity for the uptrend after last week’s slight retracement and relative uncertainty earlier this week. This uncertainty was caused by the market anxiously awaiting inflation data, which turned out to be weaker than expected.
Lower inflation data boosted investor sentiment. Hence encouraging an overall bullish outlook. Bitcoin has recovered around 6.9% over the past two days, trading at $24,433 at press time.
The price action of the past few weeks gives a rough idea of where the price is headed.
Bitcoin’s ascending channel has so far restricted the price within a support and resistance zone.
If it maintains the same range, then we should expect Bitcoin to continue rallying and a potential reversal near the $25,500 price range.
Source: TradingView
Is there a potential for an outbreak?
BTC holders should note that the bullish momentum has abated significantly, according to MACD. This compares to previous rallies within the current range, particularly in July.
However, the number of addresses with at least one bitcoin has steadily increased over the past two weeks. If it keeps the same pace, BTC might have just enough momentum for a breakout.
Source: Glassnode
On the other hand, the number of address purchases could decrease as the price approaches the resistance line. Another healthy indicator to keep an eye on is the Purpose Bitcoin ETF Holdings metric.
This ETF has been buying during the rallies and fooling a lot of BTC during the dips. Thus, they contribute greatly to the price action.
For example, the Purpose Bitcoin ETF metric saw an increase from 24,898 BTC on Aug. 9 to 26,079 BTC the next day. This aligns with the resulting bullish bitcoin price action over this period.
Source: Glassnode
Some outflows from this metric are likely to be seen as the price approaches the resistance line. This assumes there is enough selling pressure.
Additionally, Bitcoin’s recent uptrend has been supported by strong accumulation. Approximately 12.05 million BTC changed hands according to the metric of BTC consumption on Santiment. A higher MVRV ratio was a consequence of the uptrend and more traders in profit means a sell-off is imminent.
Source: Santiment
Bitcoin could deliver another retracement after the next resistance line retest. However, investors should keep in mind that the MACD indicates that the current trend may not last long.
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