Bitcoin surrounded by $42,000 as 30% of BTC supply turns profit to loss

According to new research, Bitcoin has “at least one more upside momentum” before hitting this halving cycle’s all-time high.

In a series of tweets on the current status of BTC price movements, prominent analyst TechDev hinted that contrary to many beliefs, BTC is not uncommon in 2022.

Bitcoin in 2021: No need to worry

With the price still 40% below its November ATH of $69,000, sentiment has also taken a hit – “extreme fear” still characterizes both the bitcoin and altcoin markets.

However, there is nothing to worry for TechDev, an analyst known for his optimistic views on Bitcoin’s prospects.

He analyzed the number of new wallet addresses in relation to price behavior and pointed out that last year’s scenario – new addresses making lower highs while price makes higher highs – is not unusual.

“In four of the six corrections we saw divergences where the price made higher highs and the number of new addresses made lower highs… For me, all six corrections were accompanied by reduced volume.”

There has been a lot of talk about this low volume in the past, partly because of fears that BTC could overshoot significantly due to a lack of liquidity.

However, TechDev added that overall price action relative to Fibonacci levels remains within historical standards and therefore there is no reason to assume that an ATH will not be reached before the bearish phase hits. He concluded:

“The current correction since February 2021 is occurring between the same fibs of the two-cycle loop, with reduced local volume and new addresses.”

heightBitcoin’s New Address (2-week moving average), diagram price BTC/USD and the Fibonacci level | The source: TechDev

Waiting for recovery

As reported, interest in Bitcoin has waned over the past year, particularly among retail investors.

Still, experienced traders appreciate this as leverage has reached near all-time highs and institutions are poised to begin re-entering the market.

Meanwhile, in the fourth quarter, TechDev began highlighting relative strength index (RSI) trends that again suggest ATH needs to step in.

BTC RSI remains at a significant “oversold” level. Historically, this has led to reversals and bullish pressure.

BTC candlestick chart/USD 1 day with RSI |Source: TradingView

42.000 Dollars ignite the familiar war

Bitcoin Hodler faces an important week in a number of ways as $42,000 reignites a familiar battle.

Follow record According to on-chain analytics firm Glassnode on Monday, 30% of BTC supply is currently in the red. Historically, this has been an important number for the bulls to defend.

Bitcoin’s fall from $69,000 to current levels (over 40% at one point) is not unusual, but long-term investors have particular reason to expect current support to be found.

Looking back at historical price action, Glassnode revealed that once 30% of supply is lost, the price usually bounces back up.

“As bears pressure profitable holders, Bitcoin bulls are defending a historically important level in the Profitable Percent Supply Index. This high level of care has been secured twice in recent years.”

That was the post-Covid market crash in March 2020 and summer 2021 as a result of the crackdown on mining in China. In both cases, the loss of 30% led to an upward movement in the spot price.

Percentage of Offer CLEARitcoin have words | Source: Glassnode

Going further, Glassnode admits that similar results are not guaranteed this time.

The reaction from this level will likely provide some insight into the mid-term direction of the bitcoin market. Further weakness could propel these losing sellers into capitulation, while a strong bullish momentum may be badly needed to clear sentiment and return more coins to unrealized gains.

Others are more optimistic, with online platform CryptoQuant expecting a bullish result.

“The July bull run started when it had already climbed to these levels before. The bulls are actively preparing for the new race,” said one post On the blog, the win-loss ratio argues.

“A market of holder occupy”

Before that, both long-term holders (LTH) and miners remained adamant about preserving their wealth.

With short-term holders (STH) low relative to total supply, the worst capitulation after ATH was and is gone.

“The supply of this group is close to 3 million BTC, a relative historical low that marks the transition to a HODLer-dominated market. This has been true since the May 2021 leverage purge. The low supply of STH is typical of a downtrend as older coins remain dormant and younger coins are slowly accumulated by high confidence buyers.”

Deliver CLEARitcoin held by STH vs. LTH | Source: Glassnode

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