It seems that many crypto traders are preparing for an imminent pullback in the price of Bitcoin.
The cryptocurrency once again sustained a rejection at $9,500, which quickly deflated the expectations of a bullish breakout.
One crypto technician shared the image below on July 9th, showing that there was recently an influx of short positions opening. The funding rate of BitMEX’s Bitcoin market dropped from 0.01% towards 0.00%, suggesting bears were becoming aggressive. Also, the “cumulative longs and shorts delta” went well into the negative.
BTC futures positioning data shared by trader "Byzantine General" (@ByzGeneral on Twitter).
Yet, on-chain data suggests that there remains strong on-chain support below Bitcoin’s current range.
Bitcoin Has Crucial On-Chain Supports From $8,200 to Current Prices
According to a cryptocurrency technician, there is “quite a bit of support” for Bitcoin from $8,300 to $9,300/9,400.
He shared the chart below from “Whale Map,” a website that attempts to use on-chain data to derive price signals.
The chart shows that there are large clusters of “unspent” Bitcoin at $8,200, $8,800, and $9,300. There are also smaller clusters around $8,500 and $9,000.
“Big bubbles are usually pivotal levels,” the trader who shared the chart said on the data’s significance.
Chart of BTC price + clusters of "unspent BTC" shared by trader "Byzantine General" (@ByzGeneral on Twitter).
There Are More On-Chain Metrics Signaling Strength
The clusters of “unspent Bitcoins” aren’t the only on-chain signals supporting the Bitcoin bull case.
Independent on-chain analyst Philip Swift noted in May that the Dynamic Range NVT Signal entered into a zone indicating an imminent bull market:
“Dynamic Range NVTS has been closing up above the lower green band. This is high time frame bullish. Previous NVT Signal lost its efficacy over time. This version with dynamic bands is much more useful as an oversold/overbought tool for strategic investing,” Swift wrote.
Chart from Philip Swift of Bitcoin’s macro price action alongside the Dynamic Range NVTS indicator. Chart from TradingView.com
This has been further corroborated by data shared by Rafael Schultze, the chief technical officer of blockchain analytics firm Glassnode.
Near the end of June, he shared 12 metrics showing BTC investors remain confident and have continued to “HODL.” Some of those metrics are as follows:
- More than 61% of all BTC in circulation has not moved in over a year. This means there has been a decrease in potential sell pressure.
- Addresses deemed “HODLer” addresses continue to accumulate Bitcoin, despite the uncertain price action.
- BTC’s network velocity has reached 10-year lows.