On July 21, prominent on-chain analyst Willy Woo said that there were early signs that Bitcoin consolidation is nearing completion.
The asset has been very tightly range-bound for the past month. The longer-term view stretching back four months also shows sideways trading between larger boundaries.
Futures demand is currently moving the market, said Woo before adding that “this demand has been climbing against sideways price action (this is bullish).”
The Bitcoin fundamental strength indicator has just turned upwards, and this is usually followed by a large move to the upside. “Volatility dynamics also signaling a larger move is probable,” said Woo.
Glassnode has posted data on the Bitcoin Spent Output Profit Ratio (SOPR), which “resides within a profit-dominant regime.”
The current chart shows very similar patterns to the prolonged periods of sideways trading during the bear markets in 2016 and 2019. Both were followed by a large breakout to the upside as markets moved into bull territory.
However, it is still too early to call a trend change just yet as BTC has failed to break resistance above $30K on three separate occasions in the past three months. Prices consolidating at resistance usually leads to declines back to support zones.
Furthermore, the asset has fallen back below $30K during the Friday morning Asian trading session. At the time of writing, BTC was trading down marginally at $29,875, having lost 5% since the same time last week.
Total market capitalization is flat on the day at $1.24 trillion at the time of writing. Markets have ranged between $1 trillion and $1.3 trillion since March, as even the Ripple victory could not get them out of this channel.
However, on-chain activity suggests that slow and steady accumulation is still occurring at these levels, and patient investors are still stacking sats.
Ethereum prices have also broken down below the $1,900 level and were at $1,894 at the time of writing. ETH encountered heavy resistance at $2,000 and is down 5.7% over the past week.
Most of the altcoins were in the red during Friday’s early session, with Ripple (XRP), Cardano (ADA), and Solana (SOL) losing 3-5%.
Polkadot (DOT), Uniswap (UNI), and Chainlink (LINK) were posting solid gains on the day.