Although Bitcoin (BTC) has pulled more than 13% lower against its yearly highs printed in April, its short-term technical outlook appears murky. BTC has not only fallen south of its 21 and 50-Day Moving Averages, but it also threatens to break below its range between mid-$26,000s and $31,000, which has been in place since mid-March. When these support levels give in, technicians predict a test of support in the $25,200-400 area. However, Bitcoin bears should be cautious, as a further 6% drop from current levels won’t signal any long-term bearish thesis yet.
BTC’s longer-term technical analysis shows the bear market is still intact, with Bitcoin well above its 200-Day Moving Average and having experienced a bullish golden cross three months ago. A backdrop of macro conditions favorable for Bitcoin supports the notion of a drop back to late-2022 levels under $20,000 being unlikely.
There are eight on-chain indicators signaling that Bitcoin is in the early stages of a new bull market, according to Glassnode’s “Recovering from a Bitcoin Bear” dashboard. All eight indicators are currently flashing green. BTC is trading comfortably above its 200DMA and Realized Price, while the 30-Day SMA of new Bitcoin address creation moved above its 365-Day SMA a few months ago. This trend historically occurred at the start of bull markets.
Revenue From Fees Multiple turned positive a few weeks ago, and the Z-score related to network utilization is also sending a bullish signal. In terms of market profitability, the 30-Day SMA of the Bitcoin Realized Profit-Loss Ratio (RPLR) indicator is above one, sending a bullish signal. The 30-day SMA of Bitcoin’s Adjusted Spent Output Profit Ration (aSOPR) indicator is also above one, reflecting a market well in profit.
The two final indicators, relating to the balance of USD wealth favoring long-term HODLers, show signs of weak-hand seller exhaustion. Bitcoin’s Realized HODL Multiple has been in an uptrend over the last 90 days, and the 90-day EMA of Bitcoin Supply in Profit has been in an uptrend over the last 30 days. Glassnode considers these trends as bullish signs for the market.
In summary, although Bitcoin faces potential pullbacks in the short-term, several indicators suggest a promising outlook for the cryptocurrency in the long run. Despite recent fluctuations, Bitcoin’s overall performance and multiple bullish signals indicate renewed optimism for a new bull market.
Source: Cryptonews
