On-Chain Data Suggests Bitcoin Price Trend Reversal Is Yet To Occur — What’s Happening?

Opeyemi Sule

9 months ago

3 mins read

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The price of Bitcoin (BTC) ended the week on a good note after making a late rally on Friday, September 13. This recent price upswing has led to talks about the Bitcoin price making a comeback following a horrendous start to September.

Interestingly, the latest on-chain data suggests that the ongoing price recovery might not exactly be what it looks like. So, what then is happening with the price of Bitcoin?

Declining Volume Suggests Bitcoin Price Is Still In Downtrend

In a post on the X platform, popular crypto analyst Ali Martinez shared an on-chain observation that could offer insight into recent Bitcoin price action. The relevant indicator here is Santiment’s transaction volume metric, which monitors the total amount of a cryptocurrency transacted within a given time interval.

Historically, the transaction volume metric can be associated with the strength and direction of the market’s price trends. According to Martinez, Bitcoin’s transaction volume tends to rise during periods of upward price movement, as the market is usually more active. On the other hand, BTC’s transaction volume typically decreases during a price downtrend, as market participants engage less in buying and selling activities.

As of now, the Bitcoin transaction volume continues to fall, implying that even though the Bitcoin price seems to be recovering, a definitive trend reversal has not yet occurred. This sustained decline in volume indicates market uncertainty, suggesting that the price of Bitcoin may continue to consolidate or even experience further downward movement.

The reduced market activity could be associated with the bearish history of BTC in September, with investors likely choosing to navigate the market with more caution. Ultimately, this indicates that the latest Bitcoin rally may be short-lived, with the premier cryptocurrency likely not to build on its recent momentum.

Bitcoin Whales Realize $50 Million In Profit

It appears that some Bitcoin holders are not waiting for the flagship cryptocurrency to resume its bull run to cash in on their profits. For instance, on-chain data shows that some large investors accrued a significant amount in profit following the recent Bitcoin price rally above $60,000.

Ali Martinez revealed in a separate post on X that BTC whales took advantage of the recent price spike to realize more than $50 million in profits. This is based on an increase in long-term holder whales’ realized profit (in USD), implying that old large investors sold their coins at a higher price than the acquisition price.

This level of profit-taking can be a negative signal for the premier cryptocurrency, as large sell-offs can cause downward pressure on the Bitcoin price. Interestingly, the price of BTC has not made any significant movement in the past day and continues to hover around the $60,000 level.

Featured image created with Dall-E, chart from TradingView

Opeyemi Sule

Opeyemi is a proficient writer and enthusiast in the exciting and unique cryptocurrency realm. While the digital asset industry was not his first choice, he has remained absolutely drawn since making a foray into the space over two years. Now, Opeyemi takes pride in creating unique pieces unraveling the complexities of blockchain technology and sharing insights on the latest trends in the world of cryptocurrencies.

Opeyemi savors his attraction to the crypto market, which explains why he spends the better parts of his day looking through different price charts. “Looking” is a rather simple way to describe analyzing and interpreting various price patterns and chart formations. However, it appears that is not Opeyemi’s favorite part - in fact, far from it.

Being able to connect what happens on a price chart to on-chain movements and blockchain activities is what keeps Opeyemi ticking. “This emphasizes the intricacies of blockchain technology and the cryptocurrency market,” he would say. Most importantly, Opeyemi thinks of any market insights as the gospel, while recognizing that he is only a messenger.

When he is not clicking away at his keyboard, Opeyemi is most definitely listening to music, playing games, reading a book, or scrolling through X. He likes to think he is not loyal to a particular genre of music, which can be true on many days. However, the fast-rising Afrobeats genre is a staple in Opeyemi’s Spotify Daily Mix.

Meanwhile, Opeyemi is a voracious reader who enjoys a wide category of books - ranging from science fiction, fantasy, and historical, to even romance. He believes that authors like George R. R. Martin and J. K.
Rowling are the greatest of all time when it comes to putting pen to paper. Opeyemi believes his reading of the Harry Potter series twice is proof of that.

Indeed, Opeyemi enjoys spending most of his time within the four walls of his home. However, he also sometimes finds solace in the company of his friends at a bar, a restaurant, or even on a stroll. In essence, Opeyemi’s ambivert (haha! been searching for an opportunity to use the word to describe myself) nature makes him a social chameleon who is able to quickly adapt to different settings.

Opeyemi recognizes the need to constantly develop oneself in order to stay afloat in a competitive and ever-evolving market like crypto. For this reason, he is always in learning mode, ready to pick up the slightest lesson from every situation. Opeyemi is efficient and likes to deliver all that is required of him in time - he believes that “whatever is worth doing at all is worth doing well.” Hence, you will always find him striving to be better.

Ultimately, Opeyemi is a good writer and an even better person who is trying to shed light on an exciting world phenomenon - cryptocurrency. He goes to bed every day with a smile of satisfaction on his face, knowing that he has done his bit of the holy assignment - spreading the crypto gospel to the rest of the world.

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