Will Bitcoin experience an “unfortunate rebound” before reaching a new ATH?

Bitcoin rebounded strongly from the September 7 crash, bouncing back from a local low of $ 42,800 to $ 48,000 within two weeks. Interestingly, at the time of writing, Bitcoin is the only coin with the most positive weekly ROI in the top 7 altcoins, up 5%.

Bitcoin 1 day frame price chart | Source: Tradingview

So was this just an “unfortunate impact” before a real pump, or did Bitcoin start the rally quietly? Let’s look at the status of some key metrics for a more definitive answer.

inertia

The state of the Market-Realized Gradient Oscillator (MRGO) seems pretty convincing at the moment. This model helps track changes in momentum based on predictions of market tilt and true tilt.

Any time this MRGO gets steeper over time, a sustained trend is likely to be accelerated. Historically, accelerating trends have often been bullish. Essentially every major rally in the past has seen positive momentum.

Apparently momentum has been trending negative since May, only to finally move towards positive territory. The trend looks crucial this time around and there are no warning signs predicted by the on-chain indicator.

Source: Checkonchain

Will short-term owners go broke?

When traders with weak hands tend to exit the market, they leave a negative mark on the price. When savvy investors increase the pressure to sell, some of the coins flow into the pockets of the short-term holders. When the demand is eventually exceeded, the price peaks and the market reverses. At this point, long-term holders go into accumulation mode and the supply from short-term holders (STH) begins to trend downwards.

The STH Rollover Oscillator helps to assess such trends and can identify market peaks. As can be seen from the attached graph, in the past the Bitcoin price (indicated by the green arrow) has often peaked whenever this indicator has peaked. Likewise, every drop in this indicator pulls the Bitcoin price down with it.

After each drop (purple) the market hit a bottom and then rallied again. It was around this time that the indicator started an uptrend, suggesting that the market will most likely peak in the next few months.

Source: Glassnode

How strong is the bullish momentum?

In addition, the rate of the supply shock also becomes more specific. Bitcoin’s supply shock rate has clearly been on a downward trend until recently. However, the upward move has resumed and has shown no sign of return since then.

A supply shock is an event that dramatically increases or decreases the supply of an asset. The change often affects the equilibrium value and causes the rating to change. With this comeback, the market is currently in further upward momentum as Bitcoin is currently being caught by strong investors.

If the trend goes in the same direction, market participants don’t have to worry about the price of Bitcoin. Renowned on-chain analyst Will Clemente recently shared a similar view confirm:

“Expectations will continue to rise until the end of October.”

Source: Glassnode

Taking into account the state of the above indicators, it can be concluded that the likelihood of an “unfortunate jump” situation seems very small, but it is still necessary to observe the derivatives market in order to determine the movements of the futures term. Without much drama in the days ahead, Bitcoin’s rally to its previous highs of $ 64,000 should be fairly easy.

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

Mr. Teacher

According to AMBCrypto

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