Bitcoin (BTC) price fell below $ 10,000 for three consecutive days. Despite the weakness of BTC’s short-term trend, an on-chain analyst says medium-term optimism is intact.
Bitcoin weekly chart. Source: TradingView.com
In five days Bitcoin price fell from $ 11,462 to $ 10,000, down 12.6%. Gold also struggled to recover from the weaker momentum that coincided with the recovery of the US dollar.
How is an optimistic outlook on Bitcoin still intact?
according to Willy woos, an on-chain market analyst, local chain indicators are becoming bullish.
These indicators include activities such as “HODLing”, active addresses, network activity and NVT ratio.. For example, the Bitcoin NVT signal tries to identify market spikes by evaluating the price based on the daily transaction value.
The on-chain data points likely indicate a medium-term upward trend as Bitcoin fell sharply from $ 12,000. While the price of BTC has fallen nearly 20% from its annual high, network activity remains relatively stable. Courting said September 6th:
“The local chain exchange is getting bullish (looking ahead to the next few weeks) without realizing that this has bottomed out when it may. Playing big changes is not a bad time to buy again.”
Graphic showing that the Bitcoin network activity is relatively stable. Source: Blockchain.com
The level many traders are watching is the $ 9,650 CME gap. A gap arises between the CME Bitcoin futures market and other exchanges when CME closes over the weekend. The $ 9,650 gap has existed since July.
Regarding questions about the void and the likelihood of BTC falling into that void, Woo said it could get through. About that commented::
“I also wonder if the void lies ahead of us to fill longs with solid liquidity. The whales on the futures exchanges have enough dominance for that. “
In the short term, there is concern that the NVT rate will still be 81.5. When the NVT ratio stayed above 70 in previous market cycles, it marked a local high.
The Bitcoin NVT relationship. Source: Woobull.com
Many on-chain indicators show an optimistic trend in the medium term, but some point to unstable dynamics in the short term.
$ 8,800 is an important support, a major correction is unlikely
As Cointelegraph previously reported, Traders don’t expect a 50% drop in Bitcoin price like it did in March.
Su Zhu, CEO of Three arrows capitalstressed that The likelihood that Bitcoin will drop to $ 5,000 is now less likely than BTC’s that it will rise to $ 100,000. Publicity::
“I’m in awe of the power shown at 10,000, and that probably means 100,000 is more likely than 5,000 at that point.”
Bitfinex has plenty of whale orders for $ 8,800. Since whales tend to offer the lowest levels of support to ensure liquidity, A decline to the highs of $ 8,000 is possible.