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Bitcoin’s rally has stalled at $39.2K, but a BTC price metric suggests a local bottom may be near

Supply Delta joins the optimism among on-chain metrics, but Bitcoin price action, as usual, does not share the joy.

Bitcoin (BTC) checked its latest advance on the Wall Street open on February 23rd, as the fallout from Russia continued.

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Stocks dampen crypto recovery

Various analysts’ data showed BTC/USD falling back towards the $38,000 mark on February 23, after previously reaching $39,200 highs.

Pressure from the Russia-Ukraine conflict has remained a constant threat to equities, which are closely linked to Bitcoin and altcoins.

The S&P 500 fell 0.25 percent in the first hour of trading, while Russia’s MOEX index extended its losses from February 23, falling another 7.3 percent at the time of writing.

The Russian ruble continued to fall in lockstep, breaking through 80 to the dollar on news that the United Kingdom would no longer allow Russian businesses to clear in either dollars or British pound sterling.

With so much uncertainty in the air, market participants looking for low-timeframe shots had to constantly reassess their approach.

“Am bullish on BTC over the next few months,” Blockware lead insights analyst William Clemente tweeted about the longer-term macro outlook on the day.

“On-chain holding behavior has been strong, with a lot of relative dry powder sitting on exchanges, stacked bedside in order books, and a prolonged regime of spot premium over perps. March will arrive next week, and maximum hawkishness is likely to be priced in.”

Meanwhile, Ki Young Ju, CEO of on-chain analytics platform CryptoQuant, argued that while Bitcoin continues to trail global equities, it is not all bad news for those hoping for Bitcoin to decouple and become an asymmetric hedge against global uncertainty.

“The good news is that traditional institutions are beginning to accept BTC. Its ownership is changing as new stock traders enter the market. The bad news is that Bitcoin is not a safe-haven asset. For the time being, “He summed it up.

The supply delta suggests a possible price reversal.

However, when on-chain metrics were considered, Bitcoin appeared to be far more promising, as Clemente had hinted.

On February 23, the Supply Delta metric was in the spotlight, which examines the proportion of BTC supply held by short-term and long-term holders, respectively.

While “not perfect,” its creator, Capriole founder Charles Edwards, notes that Supply Delta has been able to call at least local price tops. It was printing a bottom for long-term holder share this week, which typically occurs around price bottoms.

Long-term holders are defined as wallets that have not sold in the previous 155 days, whereas short-term holders have sold during that time.

Price peaks appear to occur immediately after short-term supply peaks.

“From a supply standpoint, this suggests Bitcoin is in a major accumulation zone,” Edwards said.

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Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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