TL;DR
- There is a minor resistance at $30,700 that’s preventing further upsides
- Whale wallets with over 1K BTC are declining
- The greed and Fear index points towards BTC greed
Bitcoin is facing minor resistance at the $30,700 level. Bulls need to break past this minor hurdle so as to prepare to break above last week’s high of $31,470. Buyers attempted to create a steady uptrend during yesterday’s session but sellers were quick to cause a reversal.
This reversal saw Bitcoin record a daily low of $30,008. Almost falling below the major support. However, experts are betting on the ETF gold rush to create long-lasting support at the $30,000 price level.
With this general overview of how the Bitcoin market looks like, let us delve into a few ‘onchains and technicals’, so as to determine the true value of the BTC/USD trading pair.
Onchain analysis
Bitcoin whales are declining
A Bitcoin whale denotes any crypto wallet holding 1,000 BTC or more. According to Glassnode, the Bitcoin network recorded the All-Time-High of Whale addresses during the 2021 crypto bull run. The number of whale addresses containing more than 1K Bitcoins was 2169. This number has declined by 23%, all the way to 1672.
Look at the chart below:
Bitcoin whale addresses chart by Glassnode/Twitter
One of the key reasons that could have contributed to this decline might be the large selloff that took place after the collapse of Terra (LUNA) and during the FTX meltdown.
Declining BTC whale accounts denote asset distribution across smaller wallets, thereby showcasing the complete decentralization of Bitcoin. In markets where there are fewer whales, cases of market manipulation are minimal.
Nevertheless, a large segment of BTC has still remained concentrated across only a few accounts. I.e 74.5% of all Bitcoins in the circulating supply are hodled in a few accounts.
This indicates there is still more to do so as to improve decentralization and reduce market manipulation in the crypto market.
Market sentiments
Bitcoin fear and greed index shifts to Greed
The Bitcoin Fear and Greed Index is a metric for measuring market sentiment. Factors that determine the fear and greed index include social media sentiment, volatility, market momentum and survey results. A ‘0’ reading indicates extreme fear, while ‘100’ indicates extreme greed.
The Bitcoin Fear and Greed Index began its fall to extreme greed two years ago when the price of Bitcoin slumped below $40K. This was around the same time when the market began correcting downward when the bears took over.
Bitcoin’s recent fear and greed index has been increasing towards 70, an indication of greed, and buyers entering an accumulation spree.
Crypto Fear & Greed Index by Alternative.Me
A number of factors are contributing to the shift towards Greed, these include:
- A steadily increasing BTC price led towards June 16th when the price broke the $30K hurdle.
- The first SEC-approved leveraged Bitcoin ETF.
- General positive market sentiments such as positive tweets and blog posts about the overal direction of Bitcoin.
Short-term traders looking to profit from short-term price trends could have pulled the Fear and Greed Index from 64 to 59 in the last 2-days.
However, this is not enough to indicate a long-term or medium-term price direction. Particularly given that the general crypto market will tend to fluctuate around greed if BTC breaks above $32K.
Technical analysis
In this technical analysis, we will delve into the current state of Bitcoin’s price based on various indicators. Bitcoin, the leading cryptocurrency, has experienced a period of consolidation recently. By examining the 20-day Exponential Moving Average (EMA), major indicators, moving averages, oscillators, RSI, MACD, and Bollinger Bands, we aim to provide insights into the potential future direction of Bitcoin’s price.
20-day Exponential Moving Average (EMA): Bitcoin’s 20-day Exponential Moving Average stands at $30,355, indicating that the cryptocurrency is currently trading around its average price over the past 20 days. This level serves as an important reference point for identifying trends and support/resistance levels.
Major Indicators: Among the major indicators, 13 are signalling a buy, suggesting an overall positive sentiment in the market. However, it is important to note that 10 indicators remain neutral, indicating mixed opinions, while 2 indicate a sell signal. This mixed sentiment suggests that market participants have differing views on Bitcoin’s short-term trajectory.
Moving Averages: Bitcoin’s moving averages present a more bullish perspective, with 12 indicating a buy signal, 1 remaining neutral, and 1 suggesting a sell signal. The predominance of buy signals indicates a positive trend, highlighting the potential for upward price movement in the near term.
Oscillators: The oscillators reinforce the bullish sentiment, with 9 signalling a buy, 1 remaining neutral, and 1 indicating a sell signal. These oscillators reflect positive momentum in the market, suggesting that Bitcoin’s price may continue its upward trajectory.
RSI (Relative Strength Index): The RSI, represented by blue and yellow lines, has touched 46. With this reading, Bitcoin’s RSI is currently situated in a neutral zone, neither overbought nor oversold. Traders often consider an RSI above 70 as overbought and below 30 as oversold. The RSI’s position at 46 implies a balanced state and does not provide a strong indication of the cryptocurrency’s next move.
MACD (Moving Average Convergence Divergence): Bitcoin’s MACD exhibits a downward trend, with the yellow line at 44 and the blue line at -35. This configuration suggests a bearish bias. Furthermore, the presence of negative short red bars on the MACD chart further strengthens this bearish sentiment. Traders should be cautious as this downward movement may indicate a potential price correction or consolidation phase.
Bollinger Bands: The Bollinger Bands provide an important range for Bitcoin’s price. The upper band is at $30,613, the lower band is at $30,008, and the middle Bollinger Band is aligned with the current price at $30,355. This indicates that Bitcoin is currently trading within a relatively tight range. Traders should pay close attention to any breakout or significant movement beyond these bands, as it may signal a shift in price momentum.
Add a Comment