Bitcoin traded at or around $30,000 for most of 2023. Throughout the year, an uptrend channel has formed which is still ongoing at the moment. If the support remains unbroken, BTC will push towards the $42,000 level or the top of the parallel channel located at that level.
The last two years for Bitcoin
The year 2023 is going to be different for Bitcoin. Bitcoin and other cryptocurrencies don’t have the same painful dips as they did in 2022. But the market is still boring. On the other hand, horizontal price movements continue. Bitcoin has been hovering mostly around $30,000 for months. But overall it remained in an uptrend. Uptrends are defined as a series of highs and lows.
Often these uptrends are supported by drawing a trendline below intraday lows. Depending on price action, sometimes a parallel channel forms, providing both support and resistance at both extremes. It also prevents an uptrend from moving up too quickly despite the general trajectory. Such a parallel uptrend channel has formed in Bitcoin. On the other hand, if the upward sloping support trendline remains intact and intact, a move to the top of the channel is likely.
When was the channel created?
The channel began forming in late 2022. Accordingly, it first acted as an upward sloping support line that was broken during the FTX collapse. Bitcoin price then trended sideways until a new, parallel upsloping support took it higher. Previous support is now acting as resistance. Also, the price has now formed the upper boundary of the parallel channel in which it is back and forth.
If the current uptrend structure continues this latest sell-off, a push towards the upper resistance limit will be possible. As time goes on, this cap will reach $42,000 in the next two weeks. If Bitcoin does indeed make a run towards the upper bound, this price will be within striking distance in early August.
Bullish Signal 1: Decreased supply of BTC on exchanges
Famous crypto analyst Ali Martinez shared an interesting bullish chart revealing that only 2.25 million BTC are currently held in known crypto exchange wallets. This is the lowest Bitcoin supply on trading platforms since January 2018.
The data shows that investors and long-term holders are avoiding selling. On the other hand, he points out that he prefers to keep his BTCs off exchanges instead. This “hodling” behavior shows that BTC holders are in a positive mood.
Bullish Signal 2: No entry from Bitcoin whales
CryptoQuant Research Head Julio Moreno highlighted another bullish sign when he shared a chart showing no entry into exchanges from large investors (aka Bitcoin whales) holding 1,000 to 10,000 BTC. “I don’t really see bitcoin whales entering exchanges,” Moreno said.
In addition, the same trend is observed among small investors. Accordingly, it shows a reluctance to deposit BTC on centralized exchanges. Commenting on the exchange deposits (7-day SMA) chart, Moreno points to a different situation. According to this, he uses the phrase “really no one seems to want to deposit money on centralized exchanges”. This type of behavior indicates that important owners and institutions hold BTC assets. It also indicates that they are potentially anticipating future price increases.
Bearish Signal: Short-term conservative (STH) MVRV metric
Chain analyst Axel Adler Jr. comments by referring to the short-term conservative (STH) MVRV metric. Accordingly, “STH MVRV is actively falling. We may see something similar to what happened with the previous two fixes.” says. The chart illustrated by Adler reveals that STH MVRV fell either near 0 or below the lows of sharp Bitcoin price corrections in mid-March and mid-June. Currently the STH MVRV is still at a somewhat high level. Therefore, a final pullback in Bitcoin price triggered by a short-term owner sell would be necessary for MVRV to hit 0.
Adler also noted that there is currently no significant entry into futures exchanges as in March and June. “Don’t expect a sharp upside or downside break,” Adler said. he added.
Binance spot liquidity analysis
Analyst @52kskew shared a comprehensive analysis of BTC Binance spot liquidity, highlighting an interesting observation. Bid liquidity (quotes > claims) and spot demands fell towards the price due to lower volatility. “Note the difference in volume from previous sales and current falling volume and minimal decline,” he added.
Considering the bid liquidity between $29,000 and $28,500, if there is a pullback in BTC, this area will be the point where buyers will step in. In a bullish scenario, spot buying takes place in this region. It is also followed by rotation from short positions. There are new long positions. The price moves towards the spot supply around $30,000. Skew says that in the sell scenario, the price exceeds the spot bid liquidity and forced sales have occurred.
Potential impact of economic data on Bitcoin
In addition, it is very important to consider the macroeconomic factors that will affect the price of Bitcoin. The release of the Personal Consumption Expenditure Price Index (PCE) today is of particular importance.
During Wednesday’s FOMC press conference, Fed Chairman Jerome Powell stressed the importance of core inflation. Therefore, the Core PCE in particular needs to continue falling to ease the Fed’s inflation concerns. When we look at Kriptokoin.com, if the 4.2% expectation for Core PCE is exceeded, a bullish reaction from Bitcoin will be expected.
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