Crunching The Data: Will Bitcoin Price Soar Or Slump In The Coming Days?

Jake Simmons

1 year ago

3 mins read

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The Bitcoin price is currently in an uncertain situation. After BTC broke below the one-month trading range between $29.800 and $31.500, the bulls have so far failed to recapture this area. A first attempt failed on Wednesday at $29.725, a second effort on Thursday at $29.600.

On the other hand, the bears currently also fail to push the price below the critical support at $29.000. In which direction the next movement will go is, as always, pure speculation, but data can give indications.

Bullish Signal 1: Decreasing BTC Supply On Exchanges

Renowned crypto analyst Ali Martinez shared an intriguing 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 suggests that investors and long-term holders are refraining from selling and are instead choosing to keep their BTC off exchanges. This “hodling” behavior indicates a positive sentiment BTC holders.

Bullish Signal 2: Lack Of Inflows From Bitcoin Whales

Head of Research at CryptoQuant, Julio Moreno, pointed out another bullish sign when he shared a chart showing a lack of inflows from large investors with 1,000 to 10,000 BTC (aka Bitcoin whales) into exchanges. Moreno stated, “”Not really seeing Bitcoin whale inflows into exchanges.”

Bitcoin exchange inflows by whales | Source: Twitter @jjcmoreno

Additionally, the same trend is observed among smaller investors, indicating a reluctance to deposit BTC into centralized exchanges. Commenting on the exchange deposit transactions (7-day SMA) chart, Moreno added, “indeed, seems nobody wants to deposit into centralized exchanges.”

Such behavior suggests that significant holders and institutions are holding onto their BTC assets, potentially anticipating future price increases.

Bearish Signal: Short-Term Holder (STH) MVRV Metric

On-chain analyst Axel Adler Jr. addressed the short-term holder (STH) MVRV metric, saying: “STH MVRV is actively falling and we may see something similar to what happened in the two previous corrections.” The chart shown by Adler reveals that the STH MVRV fell either close to 0 or even below during the lows of the sharp Bitcoin price corrections in mid-March and mid-June.

Currently, the STH MVRV is still somewhat elevated, so a last pullback in the Bitcoin price triggered by short term holder selling may be necessary for the MVRV to reset to 0.

Adler also remarked that there isn’t a substantial Inflow to futures exchanges at the moment like there was in March and June. “Don’t expect a sharp breakthrough upwards or downwards,” added Adler.

BTC Binance Spot Liquidity Analysis

Analyst @52kskew shared a comprehensive analysis of BTC Binance spot liquidity, highlighting an interesting observation. The bid liquidity (bids > asks) and spot asks moved lower towards price due to low volatility. He added, “note the difference in volume leading to previous selloff & current falling volume & minimal decline.”

Given the bid liquidity between $29,000 and $28,500, this area could be the point for buyers to step in if BTC experiences a pullback. In a bullish scenario, spot buying would occur in this area, followed by a rotation out of shorts. New longs get opened and price migrates towards spot supply near $30,000. In a sell off scenario, price grinds through spot bid liquidity and forced selling occurs, says Skew.

Binance bid asks — BTC Binance spot liquidity | Source: Twitter @52kskew

Potential Impact of Economic Data On Bitcoin

In addition, it is crucial to keep an eye on macroeconomic factors that could influence Bitcoin’s price. The release of the Personal Consumption Expenditures Price Index (PCE) at 8:30 am EST today is of particular importance.

During Wednesday’s FOMC press conference, Fed Chairman Jerome Powell stressed the importance of core inflation, which is proving sticky. Therefore, the Core PCE in particular, needs to continue falling to alleviate the Fed’s inflation concerns. If the 4.2% expectation for core PCE is exceeded, a bullish reaction from Bitcoin can be expected.

At press time, the Bitcoin price stood at $29,210.

Featured image from iStock, chart from TradingView.com

Jake Simmons

Jake Simmons, a dedicated crypto journalist, has been passionate about Bitcoin since 2016 when he first learned about it. Through his extensive work with NewsBTC.com and Bitcoinist.com, Jake has become a trusted voice in the crypto community, guiding newcomers and seasoned enthusiasts alike towards a deeper understanding of this dynamic field.

His mission is simple yet profound: to demystify Bitcoin and cryptocurrencies and make them accessible to everyone.
With a professional career in the Bitcoin and crypto scene that began right after graduating with a degree in Information Systems in 2017, Jake has immersed himself in the industry. Jake joined the NewsBTC Group in late 2022. His educational background provides him with the technical prowess and analytical skills necessary to dissect complex topics and present them in an understandable format. Whether you are a casual reader curious about Bitcoin or an investor seeking to navigate the latest market trends, Jake’s insights offer valuable perspectives that bridge the gap between complex technology and everyday usage.

Jake is not just a reporter on technological trends; he is a firm believer in the transformative potential of Bitcoin over traditional fiat currencies. To him, the current financial system is on the brink of chaos, propelled by unchecked government actions and flawed Keynesian economic policies. Drawing from the principles of the Austrian school of economics, Jake views Bitcoin not merely as a digital asset but as a crucial step towards rectifying a failing monetary system. His libertarian views reinforce his stance that just as the church was separated from the state, so too should money be freed from governmental control.

For Jake, Bitcoin represents more than just an investment; it's a peaceful revolution. He envisions a future where Bitcoin fosters a sustainable and responsible financial framework for generations to come. His advocacy is not about opposition but about evolution, about laying the groundwork for a system that prioritizes transparency and equity over secrecy and inequality.

As a journalist, Jake’s articles are crafted with the precision of a scholar and the passion of a true believer. He provides not only news but also thoughtful analysis that connects the dots between daily developments and larger economic theories. His work is a beacon for those lost in the technical jargon often associated with crypto discussions, illuminating the practical implications and benefits of these technologies.

In summary, Jake Simmons is not just reporting on a revolution; he wants to be part of it, fully committed to enhancing public understanding and adoption of Bitcoin and cryptocurrencies. His work is more than just a collection of articles; it’s a resource, a guide, and a companion for anyone ready to explore the potential of this digital frontier. Whether you are taking your first steps into crypto or are a veteran looking to stay on top of the latest trends, Jake’s insights provide clarity and foresight in an often unpredictable industry. Join him on this journey to reshape the world of finance, one post at a time.

You can engage with his latest takes on Twitter: @realJakeSimmons.

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