After a brief period of uncertainty at the beginning of this week and a slight retracement late last week, Bitcoin (BTC) has resumed its upward trends. As market participants eagerly awaited inflation data that was weaker than anticipated, uncertainty arose.
The decrease in inflation statistics boosted investor confidence. That encouraged widespread optimism. The price of bitcoin has increased to over $24,000 as of the time this article was published, representing a gain of approximately 6.9% over the past three days. Meanwhile, the price action over the past two weeks provides some insight into future price movements.
In the meantime, BTC’s ascending channel has restricted price movement within a level of resistance and support. BTC’s rally could extend if this range is maintained, with a possible reversal at the $25,500 value area
Exist Breakout Prospects?
Bitcoin investors should be wary of the fact that the MACD is showing a significant reduction in bullish momentum compared to the past rallies inside the present range, particularly during July sessions. Despite this, the number of Bitcoins held at addresses with more than one BTC has been steadily increasing over the past two weeks. Maintaining this pace could generate sufficient BTC momentum for a breakout.
Addressed purchases, on the other hand, may slow down as BTC approaches the resistance level. The Purpose BTC ETF Holdings index is yet another important indicator that must be taken into consideration. This ETF has been purchased during rallies and dumped heavily during declines. Therefore, it contributes significantly to price movements.
For example, the Purpose BTC ETF index increased from 24,898 $BTC on August 9 to 26,079 $BTC on August 10. This was consistent with Bitcoin’s bullish behavior during this time frame. On the other hand, this metric will likely see outflows as the BTC price gets closer to the resistance level. That assumes the market will experience increased selling pressure.
Moreover, BTC’s recent surge was supported by massive accumulation. According to data from Santiment, the Bitcoin age consumption metric confirmed the exchange of approximately 12,05 million BTCs. In the meantime, the upswing fueled the high MVRV ratio, and the increasing number of profit-seeking investors foreshadowed impending downsides.
Following a retest of the cryptocurrency‘s subsequent resistance level, there is a possibility that the price will undergo yet another correction. However, investors should be aware that the Moving Average Convergence Divergence indicates the current trend may not continue. Time will eventually reveal everything.