Disclaimer: The information provided does not constitute financial, investment, trading or other types of advice and is the opinion of the author only.
- The technical indicator showed that volatility was at its lowest level in almost two years
- Will the $19,000 support be crushed in the coming weeks to move the Bitcoin bulls?
The dominance of USDT, a measure of Tether’s cryptocurrency market value, has been on the rise since mid-August. This was an indication that market participants would rather hold stablecoins than crypto assets. Bitcoin has been clinging to the $19,000 support in recent weeks, but it has been steadily approaching four-month lows.
Here are AMBCrypto Bitcoin Price Predictions [BTC] For 2022-2023
Indirectly, this was also an indication of a bearish trend throughout the market. News of inflation and rising interest rates are choking the money supply of risky assets like bitcoin, and recovery could take months or even years.
Bollinger Bands indicate that there is a huge pressure underway
Since June, BTC has been trading in a range of $24.4K to $18.6K. Lows in this long-term range have been tested several times since September. Each retest produced a weaker response than the previous one.
This is likely to exhaust buyers in the upcoming retests, and BTC could crash directly through the $17.8K and $17K support levels. How far can you go to the south? It was a scary idea for the bulls, but $16.2000 could be a viable target.
The Relative Strength Index (RSI) encountered resistance at neutral 50 and simply could not climb above it in recent weeks. Balance trading volume (OBV) has also decreased since mid-September, indicating that selling pressure was the most dominant force.
The Bollinger Bands Width indicator has reached a low of 0.07 on the daily chart, a value previously reached October 2020. Although it was followed by a slow and massive rally, the current downturn in Bitcoin could have a different flavor.
The supply of exchange has reached new lows
The supply on the stock exchanges has decreased throughout the year. This showed that coins were moved from exchanges to special wallets, likely cold. Perhaps this was a sign of accumulation. The last time the exchange rate was this low was in November 2018.
The trading during the break saw a significant increase a few days ago. The same chart showed that this was the movement of BTC from the exchanges. Since July, trading at rest has been minimal most of the time and has not seen any significant increases.
Hash rate increases, but profitability does not increase
In all of these months, the Bitcoin hash rate has skyrocketed. This was a positive result, as the network was 51% more secure against attacks. At the same time, the profitability of BTC has also declined. It was close to its lows in October 2020 at $0.066 per day per 1 shot/sec.
Will miners eventually stop and have to sell their bitcoins? Or has the backlog in recent years reduced the risk of another miner capitulation event? Only time will tell, but somehow something had to be served.