Bitcoin Price Retests Key $22.8K As Metric Points To ‘BTC Buying Spree’
Bitcoin (BTC) returned to base on August 4 as higher levels gave way to a battle for the 200-week moving average (MA).
The battle for the classic Bitcoin price trend line rages on
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD falling to repeatedly test the key bear market trend line as support.
Today’s Wall Street open brought only a brief change in sentiment, with the pair surging above $23,000 before continuing its previous behavior.
The atmosphere was unchanged by the news that investment giant BlackRock had partnered with major exchange Coinbase to offer crypto trading to clients.
Instead, the familiar status quo involving the 200-week MA just above $22,800 entered another chapter, with bulls and bears still fighting for control. On-chain analytics resource Material Indicators noted that a class of whales active on the largest global exchange, Binance, was in a riskier mood this day.
“The purple class of whales has historically had the most influence over Bitcoin price action,” it wrote on Twitter along with a chart of data from the Binance order book.
“Interesting to see them dump into other classes like pumps.”
Support was thin near the spot price, the chart showed, with greater bid interest only at around $22,400 in the event of a breakdown. Meanwhile, resistance built at $23,400.
“A lot of chop here on lower time frames, but with this local sweep of the highs, we finally seem to be able to get that flush down into downside targets,” popular trader Credible Crypto meanwhile added in its latest forecast on 3 August.
“Looking for a higher low and a reversal to continue upwards to 25k+ $BTC.”
Buy data hints at upcoming BTC supply shock
In terms of buyer interest, on-chain data also showed a marked increase in the proportion of total BTC becoming illiquid.
Related: ‘Insane Proof’ Bitcoin Has Capitulated In Last 2 Months – Analysis
Originally created by William Clemente, lead insight analyst at Blockware and statistician Willy Woo, the Illiquid Supply Shock (ISS) ratio metric saw what popular Game of Trades commentator called a “massive peak” in July.
ISSR increases when BTC is primarily taken out of circulation, which in turn increases the likelihood of a price increase based on demand outweighing supply.
“HODLers have gone on a buying spree unlike anything seen since 2018,” Game of Trades commented on the day, uploading SSR data hosted by research firm Glassnode.
Glassnode itself, meanwhile, noted that hodlers en masse were still selling more BTC at a loss than a profit, but that demand was also apt to increase at the moment.
“This is typical of bear markets, and a reversal is often associated with an increase in demand,” it commented on a chart showing realized profit and loss per day.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade involves risk, you should do your own research when making a decision.
