On-Chain Data Shows Growing Investor Interest As Bitcoin Falls To $29.5K
On July 18, BTC’s price again fell below $30,000, although the recent price movement in the crab market is also supported by solid investor activity on-chain.
The price of Bitcoin (BTC) fell below $30,000 on July 18, which retail investors may not have expected given the previous month’s outcomes, but does the drop signal a change in trend?
Data suggests that it does not in the long run.
To begin with the positives, Bitcoin price is still attempting to convert the $30,000 level to support after roughly ten attempts since April of this year, but the price is consistently finding buyers in the $28,000 to $25,000 region, which buyers seem to be perceived as an expansion zone.
This opinion is backed by on-chain data from Glassnode’s Bitcoin Accumulation Trend Score, which may or may not be viewed positively by investors given that the expansion behavior of investors at the $30,000 BTC price is similar to that seen in the $28,000 to $24,000 range and close to the alleged $16,800 bottom.
According to Glassnode, “an Accumulation Trend Score of closer to 1 indicates that on aggregate, larger entities (or a big part of the network) are accumulating, and a value closer to 0 indicates they are distributing or not accumulating.”
Buyers heavily accumulated from November to December, then from March to April, when BTC recovered $30,000, they continued to do so. The indicator tells us they continue to move in the same direction in July as BTC tries to break through the $30,000 resistance or has gotten a boost from all the ETF and XRP SEC news.
Bitcoin Is Trading In A Crab Market
The present price movement and product market data show that Bitcoin is in a crab market, meaning that the price is range bound and squeezing for an extended period. According to JLabs analyst JJ the Janitor, a significant push through the $32,000 mark would catalyze a CME gap from the Luna Terra crash era.
Bitcoin CME Futures showcasing Luna crash CME Gap. Source: JJ The Janitor
The $30,000 level is a vital pivot moment in Bitcoin’s weekly market system, having performed as support in the previous bull market cycle (and now as resistance). Still, a grab beyond that level would effectively set a higher high on the more extended time frame and be a verification of a trend u-turn, with the next point of resistance around the $37,000 level.
BTC/USDT 1-week chart. Source: TradingView
Traders’ activities also influence the present crab market in the futures market. Budget is down, and open attraction is relatively lowly, and aside from retail plebs trying to long breakouts and lengthy lower support retests, or short breakouts and getting liquidated in both cases, there has yet to be a significant wave in these metrics that would boost spirit that price is on the verge of a massive breakout.
BTC/USDT derivatives data, daily chart. Source: JJ The Janitor
DXY fell below 100 last week, but it’s more likely related to how markets reacted to the Fed’s bullish actions on inflation, and too soon to expect a significant response from BTC.
Degen longs and shorts seeking to anticipate price breakouts are having little success in the short run, as shown by the price movement in crypto exchange futures.
According to JJ the Janitor, a key indicator is aggregate open interest; if it deviates significantly from its recent range, then real buy-the-dip possibilities may appear. Although it’s now moving sideways rather than up, observing a jump in OI may be mesmerizing and likely be influenced by news, regulatory, or legislative events.
While day traders and novice investors may be concerned about Bitcoin’s short-term price movement, the on-chain perspective is still quite enticing.
The Total Balance in Accumulation Addresses measure has continued its upward trend since March 16, when BTC traded at $25,000.
Bitcoin Total Balance in Accumulation Addresses (BTC). Source: Glassnode
The total balance in expansion addresses has increased since January 2022, when the price of Bitcoin was $47,800 per coin, according to other data that readers should note. Investors continued to raise their percentage to BTC despite the worst of the cryptocurrency market crash and the price decline. Several on-chain data support this.
