- Bitcoin bulls are back after shattering expectations of a sizeable retracement.
- Low demand (for now) underpins the rally as most whales and retailers sit on their coins.
Bitcoin [BTC] was preparing for what appears to be a sizeable retracement earlier this week, but that may not be the case. A quick recovery above $30,000 confirmed that the bulls are far from ready for a break.
How much is 1,10,100 BTC worth today?
You may have noticed that BTC and some top altcoins have maintained a bullish bias since the beginning of the year. Ditto for market conditions this week, especially as BTC defies bearish expectations. But will it continue the same trend above the $30,000 range for a while longer?
Bitcoin was trading at $30,272 at press time. Its one-day price chart confirmed that it was holding its relative strength above the 50% Relative Strength Index (RSI) level.
Additionally, a look at the four-hour timeframe revealed something even more interesting. The bullish momentum continued after the price briefly dipped into oversold territory on April 17th.
Source: TradingView
A classic bitcoin whale move?
BTC’s Money Flow Indicator (MFI) confirmed that liquidity was flowing back into the coin. Whether or not it will maintain the bullish momentum largely depends on whale activity.
Bitcoin supply distribution further confirmed that addresses holding between 100 and 10,000 BTC were largely responsible for the recovery. This was because they were in control of just over 35% of BTC’s circulating supply. This meant they had the most impact on BTC’s price action.
Source: Santiment
The whale categories above have grown slightly over the past two days, confirming that they have been piling up. As for BTC’s ability to sustain above $30,000, the current rally hasn’t exactly been helped by strong accumulation.
In fact, foreign exchange flows have slowed, while inflows have slightly outweighed outflows according to recent observations.
Source: CryptoQuant
Based on the observations above, one can conclude that the current momentum is not necessarily strong enough to support a robust rally. However, volatile market conditions may allow for a quick shift if investor confidence returns to the market. It wouldn’t be surprising if BTC buyers started pouring in again.
In the derivatives market, market confidence improved slightly. Both BTC open interest and funding rates have increased slightly over the past 24 hours, suggesting that demand is recovering.
Source: CryptoQuant
There was also a notable increase in short liquidations, which may have contributed in part to the recovery. It served as further confirmation that a number of traders were expecting prices to fall further.
Whales may have bought to take advantage of the momentum of leveraged liquidations. Note that this is speculation only and may not necessarily be the driving factor for the rally.
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On the other hand, bitcoin bulls have been helped by the fact that many bitcoin holders are long-term biased. Supply for the last active 3-6 months is at a five-month high at press time.
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📈 #Bitcoin $BTC Amount of Supply Last Active 3m-6m (1d MA) just hit a 5-month high of 1,880,438,993 BTC
The previous 5-month high of 1,880,340,270 BTC was observed on April 14, 2023
View metric: https://t.co/xD7zWV6u5s pic.twitter.com/vUdOXvZjqW
— Glassnode Alerts (@glassnodealerts) April 18, 2023
In addition, according to the latest Glassnode data, addresses with at least 0.1 BTC were also on a new ATH. In short, more people are buying Bitcoin for the long term.
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