BTC to Go Through Another Support Test at $30k?

Just when we thought BTC was off to a good start this week, its price slid below $34k on Tuesday — dangerously hovering over the psychological support of $30k. However, on-chain metrics and technical analysis tell a different tale. 

BTC Market Stabilizes and Enters Accumulation

The hash rate has steadied and is experiencing only a 39% decline this week. Thus, 29% of the hash power affected by China’s crackdown on crypto has come back online. What’s more? Bitcoin’s miner net position change has also flipped to the green side — indicating more HODLing and less panic selling of BTC. 

Source: Glassnode

Besides, a portion of on-chain transaction fees for exchange deposits declined to 14% from its previous peak of 17%, indicating a weakening of sell-side pressure. Even more evident, net exchange flows dipping into the negatives hint that the market is moving toward an accumulation phase. 

Source: Glassnode

The Wyckoff Accumulation

What goes down must come up! Wyckoff Accumulation forms when an asset experiences multiple drawbacks within the consolidation period. With decreased trading volume across exchanges, we are currently at the last stage of the accumulation, in which the market is exhausted after a series of tests. The next short-term pullback is known as the last point of support, and the market will start another bullish rally thereafter. 

Good Times Ahead for BTC

A stock-to-flow deflection ratio of 0.3 shows that Bitcoin is currently undervalued. Unsurprisingly, the whales are diving in and buying the dip. In fact, the overall holdings of whales have increased to 65,429 BTC this week, according to BTC supply held by addresses with 1,000 to 10,000 bitcoins. With massive activities from the whales, BTC market will continue to stabilize and accumulate this week. 

Source: Glassnode

Disclaimer: The article serves as an educational piece and is not intended for investment advice.  All investment and trading encompass direct and indirect risks, reader should consider their financial goals and risk tolerance before investing in any cryptocurrency.