BTC

Crypto analysis: BTC chart analysis, selling pressure eases

August 20, 2024

Crypto chart analysis:

Bitcoin's long-term holders has surpassed $3 billion, which is a positive sign for the cryptocurrency's long-term outlook. This trend suggests that while short-term holders are selling, long-term holders are accumulating Bitcoin.

Bitcoin's price recently traded around $58,000, slightly down by 0.7% on Monday. BTC has been stuck in a consolidation phase, fluctuating between $57,000 and $62,000 for the past ten days. Although the technical outlook remains bearish, with Bitcoin struggling to break through key resistance levels, there are signs that selling pressure might be easing, which could provide some support to Bitcoin's price.

Recent data shows mixed activity among institutional players. Ceffu, a company that offers custody solutions for cryptocurrencies, deposited 3,568 Bitcoin, worth $211.6 million, into Binance since July 31, indicating that institutions might be selling Bitcoin. However, on the same day, Galaxy Digital, a prominent investment firm in the crypto space, withdrew 400 Bitcoin, worth $23.4 million, from Binance, suggesting a different approach.

The Puell Multiple, an indicator that measures Bitcoin miners' profitability, currently stands at 0.7, which could indicate reduced selling pressure from miners. Historically, when this metric is low, it means that miners are earning less than the average, possibly leading to decreased sales of Bitcoin. This pattern has been observed in previous bull cycles, like those in 2016 and 2020, and it might be happening again in 2024, signaling the end of a price adjustment period and a potential bullish rally later this year.

Additionally, the realized capitalization for Bitcoin's long-term holders has surpassed $3 billion, which is a positive sign for the cryptocurrency's long-term outlook. This trend suggests that while short-term holders are selling, long-term holders are accumulating Bitcoin, reflecting their confidence in its future potential. This accumulation by long-term holders could provide further stability and support for Bitcoin's price in the coming months.

Technical analysis (BTC):

Bitcoin's price is currently moving between $57,115 and $62,066, which are key Fibonacci retracement levels. These levels are calculated from the high on July 29 and the low on August 5. On Monday, Bitcoin showed a small increase of 0.7%, bringing its price to $58,000. This movement indicates that Bitcoin is in a phase of consolidation, where the price is fluctuating within a specific range without a clear direction.

If Bitcoin manages to rise back to $62,066, it might face resistance at this level. This is because $62,066 aligns with both a previously broken trendline and the 100-day Exponential Moving Average (EMA), which is around $62,226. These factors combine to create a significant resistance zone. Overcoming this resistance would be crucial for Bitcoin to continue its upward movement.

However, if Bitcoin fails to break through the $62,066 level, it could lead to a drop back to $57,115. If the price continues to decline from there, it might even fall by 19%, reaching the daily support level at $49,917. The Relative Strength Index (RSI) and the Awesome Oscillator (AO) on the daily chart are both below their neutral levels, indicating that the momentum is currently weak, which could add to the likelihood of a downward move.

On the flip side, if Bitcoin can close above the $62,066 mark, it might pave the way for a rise towards the August 2 high of $65,596. This move would create a higher high on the daily chart, signaling stronger bullish momentum. If this happens, Bitcoin could potentially increase by another 6%, aiming to test the weekly resistance at $69,648.