New technical analysis carried out by BELOBABA, through its CIO (Chief Investment Officer) Jesús Sánchez-Bermejo. This time, performing an in-depth analysis on the 200-week moving average and the bitcoin heat map.
What is Bitcoin?
Aún hay muchas personas que no saben realmente que es. Haré una actualización de información para novatos/as: #Bitcoin ($BTC ) es la primera criptomoneda descentralizada exitosa (hubo antes 6 intentos de cripto o seudocripto, que no lo consiguieron; otro día se realizará un artículo sobre ello, para personas interesadas en la prehistoria blockchain & cripto).
Bitcoin uses peer-to-peer technology to operate without the need for a central authority behind it. Bitcoin transactions are recorded in open source software (everyone can see them).
Bitcoin uses blockchain technology to ensure transactions are secure and censorship-resistant. A blockchain is a distributed ledger or shared database that, in the case of BTC, anyone can access to verify transactions.
While anyone can access these transactions, bitcoin works through pseudonymous addresses. This means that while anyone can see that the transaction occurred (i.e. address A sent BTC to address B), often only the sender and recipient know who is behind each address.
Blockchains are essentially built through blocks of data chained together, forming a chain of blocks, with each new block building on the previous one.
Transactions are verified by validators, who in the Bitcoin network are called miners. These use specialized hardware to “mine” blocks and add them to the blockchain by solving complex mathematical problems.
Miners are rewarded through a fixed BTC reward included in each block, called a coinbase reward, and with transaction fees attached to the transactions included in the blocks they mine. Data stored in blocks is encrypted using Bitcoin's SHA-256 hash algorithm.
The supply of bitcoin is limited to 21 million coins (there are no more) and each block is added to the network every almost 10 minutes.
The time of each block is kept stable by a difficulty adjustment mechanism, while BTC inflation is controlled by preset code before its genesis block, and the reward on each block is halved every 210,000, or approximately every four years.
Each bitcoin is divisible to eight decimal places, the smallest being a satoshi: a satoshi is equivalent to 0.00000001 BTC... something that is taken for granted but is not correct, since for miners, to achieve their profit, they must go to decimal number 23 (after the comma, bitcoin actually has 23 decimal places, a fact that even people who already invest are unaware of).
Technical analysis applied to onchain analysis
On-Chain analysis is similar to observing the pulse of bitcoin through a financial ultrasound.
It focuses on data recorded directly on the blockchain, such as transactions, wallet addresses, and hash rates.
It can also be applied to moving averages with heat maps based on their distance to the midpoint (where the moving average crosses). Since its first market price ($0.003), the price has risen a lot. It reached $1 in February 2011 and the 200-week moving average heat map has been active since January 2012, which is just what we are going to analyze.
Bitcoin 200 Week Moving Average Heatmap
Today's technical analysis takes as reference the identification of the price channel, using a heat map on a long-standing moving average, in this case 200 weeks.
In each of its major market cycles, the price of bitcoin historically bottoms around the 200-week moving average.
This indicator uses a colored heat map based on the percentage increase of that 200-week moving average.
Depending on the month-over-month % increase of the 200-week moving average, a color is assigned to the price chart.
We could say that if we identify on a logarithmic chart of bitcoin, the trend of this moving average and the volatility of the bitcoin price referenced to the heat map, we get an idea of when the price is bought or close, and when it is oversold, in the long term.
The current visual conclusion about bitcoin is that now, the price is NOT overbought and we would be in the low range to decide to enter it. As I always say, this is not a recommendation, but rather a technical assessment of the investment decision.
Additionally, I have channeled the price along with the heat map, to identify a bullish channel in this logarithmic bitcoin chart, in the long term, to see that right now, the price seems to be between technical support and real support ( like the shoulder of a road) and it is exactly where it has been in the last 10 months, although in an upward channel trend.
Will it jump within said road to look for its central point (medium target)? It will do it sooner rather than later, understanding that we are observing the price with a 200 Week Moving Average Heatmap, and each observed point is one month.
The #halving is approaching, the #ETFs spot is approaching and the price is in interesting long-term support zones in a logarithmic ascending channel. We add 2 + 2 again to propose at what historical moment the investment decision seems to be found.
Source: Territorioblockchain.com
This content is for informational and educational purposes. There is no consumer protection. Your capital is subject to risks. It is not a recommendation to buy or sell crypto assets. Please do your own research or contact your trusted financial advisor.
