bitcoin (BTC) The price dipped below the $30,000 level on July 18, which, given the developments of the last month, retail investors may not have expected, but does today's move lower represent an upcoming change in trend?
The data suggests that in the long term this is not the case.
To get to the positives first, the Bitcoin price is still trying to flip the $30,000 level to the support level after about 10 attempts since April this year, but the price is continually finding buyers in the $28,000 to $25,000 buyers seem to be viewing as an accumulation zone.
Glassnode's Bitcoin Accumulation Trend Score on-chain data supports this sentiment and could be positive, depending on how investors view things, as investor behavior at a BTC price of $30,000 reflects the same accumulation behavior seen in the $28,000 to $24,000 zone and near the supposed bottom of $16,800.
According to glassnode, "An accumulation trend score closer to 1 indicates that, as a whole, the largest entities (or a large part of the network) are accumulating, and a value closer to 0 indicates that they are distributing or not accumulating".
Basically buyers accumulated strongly from November 2022 to December 2022 and were strong accumulators from March to April 2023 when BTC rallied $30,000 and the metrics suggest they are doing the same in July when BTC tries to conquer $30,000 resistance or received a momentum of all ETFs and XRP SEC News.
Bitcoin is in a crab market
Current price action and derivatives market data suggest that Bitcoin is in a crab market, where the price remains range bound and consolidates for an extended period of time. As JLabs analyst JJ the Janitor noted last week, a strong push through the $32,000 level would catalyze a Luna Terra crash-era CME gap-fill.
From a Bitcoin weekly market structure perspective, the $30,000 level is an important pivot point that has worked as support in the market's previous bull cycle (and now resistance), but a catch above that level. it would essentially set a higher high over the longer time. frame and be confirmation of a trend reversal where the next resistance point is around the $37,000 level.
The activity of traders in the derivatives market is another contributing factor to the current crab market. Funding is low, open interest is relatively low, and, in addition to the retail plebs who are looking for breakouts long and retests of lower support, or breakouts short and selloff in both cases, a significant increase in these metrics would inspire confidence that the price is on the brink of a massive breakout has not emerged yet.
Sure, DXY fell below 100 last week, but possibly more to do with investor reaction to the Fed's positive steps on inflation and too tight a time frame to expect a massive BTC reaction right away.
Price action on crypto exchange futures highlights degenerate longs and shorts that try to get ahead of price breakouts and are not having much success in the short term.
JJ the Janitor suggests that one metric to watch is aggregate open interest, if that breaks sharply from the current range then some real buying opportunities could emerge on the dip. Currently, it is still in an uptrend, albeit sideways, but seeing an increase in OI could also be interesting and probably driven by news, regulatory or legislative events.
Related: Bitcoin Price Dips Below $30K as Macro and Regulatory Concerns Take Center Stage
While Bitcoin's near-term price action could raise some concern among new investors and day traders, the on-chain outlook is still quite compelling.
He #Bitcoin The supply of long-term holders remains at an ATH of 14.5 million BTC. This suggests that mature investors prefer to accumulate Bitcoin, rather than distribute. pic.twitter.com/VkY9uTAVGG
- glass node (@glassnode) July 18, 2023
At the same time, the Total Balance in Accumulated Addresses metric has also resumed its bullish trend since March 16, when the price of BTC traded at $25,000.
Readers should also note that the metric also shows the total balance in the accumulation addresses increasing since January 2022, when the price of Bitcoin was trading at $47,800 per coin. What is apparent is that during the worst of the crypto market crash and Bitcoin price sell-off, multiple on-chain metrics show that investors continue to increase their allocation to BTC.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
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