The crypto market is on fire! The price of Bitcoin (BTC) has fallen back below $30,000 on July 18, surprising some retail investors. But stop there! Not everything is lost! On-chain data suggests that this drop is not necessarily a sign of a long-term trend change.
Despite the uncertainty, there are reasons to remain hopeful. Buyers appear to be using the $28,000 to $25,000 zone as an accumulation area, indicating confidence in the market. According to Glassnode's Bitcoin Accumulation Trend Score, this accumulation activity is similar to that seen in the past near $24,000 and even at the bottom of $16,800!
โ๏ธ๐ Accumulation or distribution? โ๏ธ๐
How do you know if the big players are accumulating or distributing? Glassnode has the answer:
The Bitcoin Accumulation Trend Score. A value close to 1 indicates accumulation, while a value close to 0 suggests distribution. And right now the score is pretty close to 1!
Over time, investors have shown their confidence in Bitcoin by accumulating heavily, which could be a positive indicator for the future. However, we cannot ignore the fact that the current market is in a sideways phase, with the price consolidating in a range. For there to be a trend reversal, BTC needs to break the $30,000 resistance and set a higher high around $37,000.
๐๐น Derivatives market data ๐น๐
Derivatives markets also play an important role in this story. Funding is low and open interest is moderate, suggesting that the market is yet to witness a significant surge that would drive a breakthrough in Bitcoin price.
JJ the Janitor, an analyst at JLabs, highlights that one metric to watch is aggregate open interest, as a sharp decline from current levels could open up buying opportunities in the fund. So stay tuned for news, regulations and legislative events that may influence this exciting market!
๐๐ช Compelling on-chain perspective! ๐ช๐
But not everything is uncertainty. The data #on-chain continues to be encouraging! The Total Balance metric in Accumulation Addresses shows an upward trend since March, when the price of #BTC was trading at $25,000. Even during the crypto market crash, investors continued to increase their allocation to Bitcoin, reflecting confidence in the long-term potential of this cryptocurrency.
So, in summary, although the price of #bitcoin has fallen to $29,500, the on-chain data reflects growing investor interest and a sentiment of accumulation in the market. The rollercoaster of the crypto world continues to excite and surprise, and the adventure is just beginning! ๐ข๐๐
