A year ago Bitcoin (BTC) was worth just over $15,000, after rising to almost $70K during the latest bull run. Today, however, after a fairly intense bear market, it has more than doubled its value, remaining above the 35K threshold. What triggered this movement? And above all, what should we expect now? While we can answer the first question with some certainty, no one would be able to answer the second, but we can make some interesting hypotheses.
Let's start by analyzing the situation of the last year, from the technical analysis on the graphs, then moving on to the on-chain and fundamental analysis.
Technical Analysis
In one year, Bitcoin (BTC/USD) has followed an absolutely growing trend. The chart, in the last part of 2022, was below the exponential moving averages (EMAs), but with the new year it has forcefully broken through both the 50-period and 200-period averages. Between February and March we then witnessed the first Golden-Cross of the last 365 days: it is an important bullish signal where the EMA50 crosses the EMA200 from bottom to top. Continuing, Bitcoin therefore reached increasingly higher values, stumbling only between September 2023 and October, when the two averages came close to each other several times. Finally, since November, we have witnessed the recovery of the zone above $32k with an important bullish push. Today we find ourselves orbiting between $35k and 38k, a fairly large area but which reserves us a nice liquidity squeeze. Above this zone there are several resistances, one around $38k and one between 40 and $42,000. However, the price significantly distanced itself from the EMA50, more than it had done in the last 365 days. Hyper-extension usually heralds a retracement to consolidate the structure and the more a chart extends, the more likely it is that a sudden decline will occur. This does not mean that the bear market will rush back into the market, but there is a possibility that a small, downward movement will occur, probably with a view to testing a support zone. The closest is located at $32000 and, if retested successfully, it would consolidate further.
BTC.D: This is the dominance of Bitcoin compared to the rest of the cryptocurrencies. BTC.D, in fact, describes the strength of Bitcoin alone as an asset. As can be seen from Tradingview, the dominance trend is clearly positive, even if it has shown a slight decline in the last period. This is an indication of the fact that capital has partly moved from BTC towards alt-coins. Obviously this is a very small movement, but if it were to continue it would start what is called the alt-season.
Total Marketcap: At the moment the total marketcap of all cryptocurrencies amounts to approximately 1.38T, which is almost half compared to the peak reached during the last bull-run. Here too the trend is growing and, barring particularly negative events, a clear rise is expected given the fact that there is no strong resistance in sight.
On-chain analytics
On-chain analysis is the tool that allows us to understand, among other things, how money flows move. A very interesting graph to observe is represented by the Bitcoin reserves owned by exchanges in relation to the price of the asset. In fact, it shows how in the last year the number of coins deposited in the wallets of the exchanges has significantly reduced and is continuously decreasing. Taking into account the increase in the price of BTC and the fact that it usually settles to sell, the rather obvious conclusion is that many investors believe that it is not yet the time to make a profit.
Furthermore, it must be kept in mind that the price is determined by supply and demand in the market and for this reason, when supply fails or demand becomes more important, what is called Supply-squeeze can occur. This is a rather infrequent (but still possible, as Glassnode reminds us) case of an instant increase in the price of an asset. It must be said that all the conditions for this to occur are not yet in place: in fact, the demand is missing. The latter presents itself forcefully when the price rises as many new investors are attracted who hear about it from the media and hope for an easy profit. Periodically, in fact, the price of Bitcoin tends to rise (usually after the Halving) and on these occasions public interest in it increases due to the fear of "missing out" (FOMO).
ETH/BTC
Finally, let's take a look at the chart of Bitcoin against Ethereum, its main rival. This graph is very important because it gives an idea of which of the two main cryptocurrencies by capitalization is performing better. There are many traders who "play" on the trend of ETH/BTC and the moving volumes are very high. At the moment, however, we are at July 2022 levels, which is what appears to be key support. The monthly candlestick chart has bounced off the 50-period simple moving average and appears poised to move back up. Unfortunately it is still early to draw conclusions, in fact some more confirmation is needed. Ethereum has had excellent performances and the news of a probable spot ETF has shocked the markets. We remain to see whether it will aim for $3000 or not and how it will modify ETH/BTC.
Conclusions
In one year, Bitcoin has certainly not remained on the sidelines on the world financial scene. It has given much older and more capitalized assets a hard time and is preparing for its next halving, in about 160 days. Furthermore, another fundamentally important change is looming on the horizon: I'm talking about the probable approval of the spot ETF. This is unprecedented for BTC and would lead to the entry of a lot of capital into the crypto world. If we combined the two things, halving and spot ETFs, the scenario that appears is certainly bullish and it is difficult to hold back expectations. Keeping your feet firmly on the ground, however, is a must when talking about investments. In fact, we must consider a second scenario that is much more probable than the first and also less attractive. Up to now, in fact, many requests for approval of financial products with Bitcoin as the underlying have been rejected by the US Securities and Exchange Commission (SEC). In the opinion of the writer, the requests now pending will not (unfortunately) be treated very differently. If there were to be a further postponement or refusal, therefore, the price would certainly be affected, perhaps giving that shock we were talking about just above. The advice is to proceed calmly with speculation and wait for further confirmations. The overall performance of the asset makes it a "safe bet" among cryptocurrencies, but if approached with due precautions.
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