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June 30, 2022
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Bitcoin

Bitcoin at $ 28,000? This is what the on-chain data shows

Bitcoin is still stagnant in its current range. The first cryptocurrency in terms of market capitalization cannot show a clear conviction. The bears have gained momentum and may soon go on the offensive. As of this writing, BTC is trading at $ 33,793 with a full range sideways trend.

An analyst nicknamed “Coin Casanova” collected bearish on-chain data that suggests further declines for Bitcoin. Like many traders and investors, Casanova believes some on-chain experts are sharing analyzes that determine Bitcoin’s low. However, they are unable to do the same when “peak” signals exist.

The analyst says Bitcoin appears to be weak enough to be pushed back by any significant increase in selling pressure. As a first target, Casanova believes Bitcoin could fall below its annual opening and hit the $ 28,000 mark.

In longer time frames, the analyst suggests keeping a close eye on the number of short-term holders using the Glassnode index – Bitcoin Realized Cap HOLD Waves. When this metric rises by around 80%, the BTC price experiences an extended downtrend or a long period of accumulation. The analyst added:

(…) Short-term holders: above 80% marked the peak earlier, I believe we need them to drop out completely and go back to the 20% range.

When the same indicator is applied to long-term holders, the analyst says it is a bullish signal that Bitcoin whales have begun to accumulate again. However, it may be a long time before the growth of this metric has an impact on the market, as seen below. Meanwhile, the price of BTC may continue to decline.

long term holders: we are finally doing an upward curve so the whales are starting to pile up, but it’s clear that we WILL NOT TOUCH the DNA until at least we’re back in the 50% range.

Bitcoin whales are selling

Casanova claims that Bitfinex whales played a major role in BTC’s recent price action. While some analysts are using on-chain activity such as address growth to bolster their bullish narrative, this metric could also indicate that big investors have been more active in recent months.

The Chinese crackdown on the BTC mining and cryptocurrency industry had its consequences. The whales moved their funds, increasing the selling pressure in the market and impacting Bitcoin’s price performance.

Finally, institutional BTC adoption may be on a pause. According to Casanova, many experts exaggerate the influence of these players on current prices. There have been some announcements from traditional giants like the George Soros Fund, but that’s not enough to fuel a sustained rally.

Bitcoin is going through one of the most peculiar moments since its inception. Big players need to come back to the market to add new fuel to the BTC price. For now, the first cryptocurrency in terms of market capitalization may remain stagnant in the current range.

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