It has been an intense market for bitcoin as it entered the last week dealing at $32,500 but downslope on Tuesday to as low as $28,800, examining an important support level but promptly reconstructing to deal at $34,520 as at when this report was written.
It was the first time the Bitcoin’s Year-to-Date (YTD) price performance turned negative represented by the dip to the support level as at the start of the year the coin was at $29,000.
Bitcoin closed the week with a green candle in spite of it testing the critical support zone because the current price of Bitcoin means a 6.22% profit for the week.
Following the foot steps of Bitcoin, Cryptocurrency market capitalization began the last week with a capitalization of $1.38 trillion and then fell rapidly to $1.15 trillion on Tuesday.
Since Tuesday and as at now, the market is recovering, the loss taken by the market capitalization has almost been regained back in the week, because with 0.28% it is marginally down from the last week, presently at $1.37 trillion.
An on-chain analytics Willy Woo said in his newsletter that accretion from long-term whales and skilled market participants have gone on.
Using the illiquid supply change metric he noted that there is still a trend of powerful accretion from statistically very low likelihood of selling entities.
Willy Woo used another indicator, the Bitcoin Liquid Supply Ratio (LSR), the scarcity or liquidity of Bitcoin is examined using this metric.
He pointed out that the LSR signalled a bullish divergence that is clear, in the ratio. Late January, earlier this year was the last time in the ratio, a bullish divergence was this clear when there was recovery from the correction.
The idea of Re-accretion of the flagship cryptocurrency is supported by this.
He expressed, “as the price is decreasing, the trend of strong hand buying is increasing.”
What to be interested in, this week
To show the market is still in a bull run, Willy Woo speak of many other on-chain analytic indicators to back his theory.
Bearing in mind his analysis, investors need to look out for the $36,000 trading zone which the market is trying to break through.
Once more, the market will test the $40,000 trading zone should a break above this zone happens but a larger sell-off could be at play if the market is unable to break the $36,000 zone.