Bitcoin
This On-Chain Trend Suggests Bulls are About to Regain Control Over Bitcoin
Cole Petersen | Feb 01, 2021 | 18:00
- Bulls have been struggling to gain decisive control of Bitcoin throughout the past few days and weeks
- This has resulted in it being quite heavy, with each rally being aggressively sold into as bears aim to push it back down to $30,000
- Despite this, the crypto has been able to hold strong within the lower-$30,000 region, and every dip below $30k has been met with massive buy-side support
- There’s a possibility that this support is coming from institutional buyers
- One trader is now noting that one on-chain trend does seem to indicate that upside could be imminent in the near-term
- The balance of BTC being held on exchanges has been plummeting and is the lowest it has been since the macro bottom in December of 2018
Bitcoin has been struggling to gain momentum in either direction, but the aggressive selling into every attempted pump suggests that bears may currently have an edge over it.
The crypto’s slight weakness at the moment has not been enough to spark any prolonged downtrend, however, and many analysts remain bullish in the short and mid-term.
On-chain data supports this sentiment, as the spot reserves of BTC on exchanges have been dropping rapidly throughout the past couple of weeks.
Bitcoin Struggles to Gain Momentum as Consolidation Persists
At the time of writing, Bitcoin is trading up just over 2% at its current price of $33,850, which marks a notable decline from its recent highs of nearly $35,000 that were set overnight.
This rally may have come about due to Elon Musk’s appearance on Clubhouse last night, which led many to speculate that he would discuss Bitcoin and maybe make a big announcement surrounding it.
He did note that he believes BTC is on the cusp of gaining mainstream adoption, but he didn’t announce that he has purchased any.
This On-Chain Trend is Greatly Favoring Bulls
One analyst pointed to the balance of spot Bitcoin on exchanges as a bullish trend that seems to favor imminent upside.
He noted that global BTC spot reserves are now at the lowest since the macro bottom in December of 2018.
“Spot reserves dropped pretty hard yesterday (which is bullish). Global $BTC spot reserves are now at its lowest point since the macro bottom in December 2018.”
Image Courtesy of Byzantine General. Source: BTCUSD on TradingView / CryptoQuant
Unless Bitcoin breaks below any key technical levels in the mid-term, its present consolidation phase will likely result in the crypto seeing an upwards expansion in the near-term.
Featured image from Unsplash. Charts from TradingView.
