Technical Analysis
Table of Contents
Bitcoin
After three consecutive months of decline, Bitcoin is back with a bullish monthly candle. Based on the price channel related to the previous two cycles, Bitcoin is still well controlled in the range.
The price level oscillates around 200 WMA. Based on the previous two cycles, a break out of the range of this moving average usually signals the start of a new bull cycle.
Currently, Bitcoin is in the resistance zone of the 23K – 24K price level and has not broken through the minor price channel (black line). In a good case, BTC can break this resistance and pass through the price channel; it will be able to approach the 26K-28K resistance area quickly. However, BTC will likely need to retest the pre-recorded downtrend line, and the price needs to be kept in the 22.7K – 23K range before a breakout occurs.
Onchain analysis
LTH-SOPR
We need to observe the 155-day moving average of the LTH-SOPR data. The main reason for using this moving average is that according to the LTH-SOPR interpretation:
The adjustment was made by not accounting for 155days less lived coins’ movements to track long-term investors. It excludes short-term investors or coins and only focuses on long-term activities. In two previous cycles, there was a complete capitulation that would be appeared later when the 155DMA value drops below 1. Now, this moving average is close to the threshold that needs attention.
UTXOS Value Bands & UTXOs Count Value Bands
This week, we saw the upside volatility even as the Fed announced rate hikes and negative GDP. There have been many arguments about the recession after two consecutive negative quarters. However, the price of Bitcoin is still in tune with the stock market as it has skyrocketed nearly 19% this week. This price increase can be a manipulation by the market makers. Based on on-chain data, including UTXOs Value Bands (U-V-B) and UTXOs Count Value Bands (U-C-V-B), I realized there are particular signals to explain the pump this week.
I assume that the entities holding the total supply of UTXOs with the balance of:
– Range 10K BTC = Humpback
– Range 1K – 10K BTC = Whale
– Range 100 – 1K BTC = Shark
Based on CryptoQuant’s Definition: UTXOs Value Bands show the distribution of all UTXOs, and UTXOs Count Value Bands indicate the number of UTXOs according to their value. When observing the combined on-chain data, the entities holding the total supply of UTXOs range 10K BTC getting the spiked value from 12 Jul, it is similar to the high value on 28 Jan, and BTC price got a rally from 33K-45K at that time.
Meanwhile, there are drops in these data for whales and sharks; they are seemly distributing still. So, the Humpback’s movement can be an explanation for the pump this week.
Conclusion: We still don’t know whether there will be a real rally after half a year of decline or just another dead-cat-bounce. We still need to be patient and need more clear signs to see if the recovery and a new cycle have begun or not.
