After a minor retracement last week and uncertainty earlier this week, bitcoin has resumed its upward affinity. This uncertainty arose as the market eagerly awaited the inflation data which turned out to be softer than expected.
Due to lower inflation, investor sentiments increased. Hence, encouraging an overall bullish outlook. Bitcoin managed to rally around 6.9% over the past two days and traded at $24,433 as of press time.
Its price action over the past few weeks gives an idea of where the price is headed.
Bitcoin’s ascending channel has so far restricted the price within the support and resistance zones.
If it maintains the same range, we should expect bitcoin to continue rally, with a potential reversal near the $25,500 price range.
Is there any breakout potential?
BTC holders should note that the bullish momentum has reduced significantly according to the MACD. This is in comparison to previous rallies within the current range, especially in July.
However, over the past two weeks there has been a steady increase in the number of addresses holding at least one bitcoin. If it maintains the same momentum, BTC could have enough momentum for a breakout.
On the other hand, as the price approaches the resistance line, there may be short buying addresses. Another healthy indicator to watch is the Objective Bitcoin ETF Holdings metric.
This ETF is buying during rallies and cheating a lot of BTC during downtrends. Thus, contributing heavily to the price action.
For example, the Objective Bitcoin ETF metric recorded an increase from 24,898 BTC on August 9 to 26.079 BTC the next day. This aligns with the resulting bullish bitcoin price action during this period.
Some outflow will likely be seen from this metric as the price approaches the resistance line. It is believed that there will be substantial selling pressure.
Furthermore, Bitcoin’s latest uptrend was supported by strong accumulation. Roughly 12.05 million BTC changed hands according to the BTC age consumption metric on Sentiment. A higher MVRV ratio was the result of an uptrend, and more traders in profit means a selloff is waiting to happen.
Bitcoin may provide another retracement after the next resistance line is retested. However, investors should note that the MACD indicates that the current trend may not last long.