Is Bitcoin back in bullrun? – It’s the question on everyone’s lips: is Bitcoin finally in early bullrun condition? With the Bitcoin price up nearly 80% since the start of the year, is the bear market finally over? From a technical point of view, the price remains stuck below the polarity zone between $30,000 and $32,000. This zone had enabled the price to rebound during the last bullrun, and it will be vital to regain this level as support. Some information from the on-chain analysis is extremely relevant in determining whether the market is on the cusp of a new uptrend. Let’s take a look at the on-chain situation for Bitcoin.
Bitcoin price rises, whales keep quiet
By tracking the various movements present on the network, on-chain analysis allows us toidentify operators called « whales. In concrete terms, entities with more than 1,000 BTC in their portfolio are whales. Tracking these portfolios allows us to make hypotheses about the market’s configuration. Here is the chart ofevolution of addresses with over 1,000 BTC :
Usually whales accumulate BTC before the bull market as was the case at the end of 2018. Indeed, the number ofaddresses with more than 1,000 BTC increased (accumulation) from 2019 to early 2021. In February 2021, operators began to distributing and the price has struggled to keep rising. Since the beginning of the year, Bitcoin’s price has been rising, but whales remain very discreet. There has been a change in behavior since the beginning of the year, but we are still far from the accumulation seen from 2019 to 2021.
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Accumulation in progress on Bitcoin
As we’ve seen, the whales aren’t in the game at the moment. However, what is the behavior of market operators in general? The liveliness indicator corresponds to the BTC liveliness. When the curve is rising, rejuvenation takes over from maturation. Operators are then in the process of distribute. When the price falls, however, the situation is reversed. In fact, we can see that traders are currently accumulating BTC:
In bear markets, the tend to accumulate BTC as was the case in 2018. On the other hand, as soon as the price explodes upwards, the trend changes. Traders then adopt a distribution behavior (profit-taking). At present, operators are still accumulation phase. The rise in the BTC price from $15,000 to $30,000 has not led to any change in behavior.
To complete the analysis of BTC’s vivacity, we can take a look at the CDD. This makes it possible to understand whether operators are taking profits :
When the CDD is highthis shows that operators are in the process of taking profits. This behavior was particularly noticeable in January-February 2021. Despite the rise seen since the beginning of the year, the operators are not distributing significantly. These data are consistent with those from the liveliness graph above.
Hold the $29,000 on Bitcoin to avoid a return to $20,000
In this section, we will focus on operators who don’t keep their bitcoins for long (STH)and those who do keep them for a long time (LTH). STH tends to react strongly to their emotionsIt is for this reason that returns at the realized price level of STH enable a rebound (bullish trend) or a rejection (downtrend). For the moment, the is above the realized price of LTH and STH :
As long as the share price is above the realized STH price, there’s not much to worry about. In this situation, the trend is considered bullish. Returns to the realized price level often lead to rebounds at the price level. On the other hand, if the price falls below the realized price of STHshort-term holders are inclined to panic and sell quickly. This can lead to bearish volatility at the price level. In this case, the price tends to reach the realized LTH price. This was notably the case in March 2020, or in 2022. The price could then fall towards $20,000.
However, this is not automatic. In May 2021, the share price fell below the realized price of STH without reaching the realized price of LTH. Even so, this is a non-negligible risk.
Huge resistance lies in BTC’s path around $30,000
The chart presented by the Whalemap site displays the volume accumulated by traders as a function of Bitcoin price. A hard zone is around $30,000 for the Bitcoin price:
Indeed, there are more than 800,000 BTC accumulated around $30,400. This makes the 30,000 an important resistance for the price. Also, we can see that the at $29,000 is an excellent support zone. In all, nearlyone million BTC accumulated at this level. Once again, we can see that the level at $29,000 is the key for what happens next. If the price fails to break the level at 30 000 $and that the support at $29,000 gives waythe price could return to the level of the next solid support at $27,000. Indeed, traders have accumulated more than 350,000 BTC at this level.
Thanks to the on-chain data, we can see that whales are not yet accumulating on the Bitcoin price. When the price explodes upwards, whales are usually on the train. For the time being, whales are leaving the king of cryptocurrencies behind. On the other hand, the liveliness indicator is showing an accumulation of traders. With the price up around 80% since the start of the year, traders are continuing to accumulate.
At the same time, it’s interesting to note that the price should take back the $30,000 zone as support. For the time being, this level acts as resistance. Also, the $29,000 level is an important support level to hold on to, to avoid sliding towards support at $27,000. Bear in mind that a return to $20,000 is quite possible. The risk would be present if the price were to fall below the realized price of short-term holders. As a result, it’s still far too early to talk about the start of the bull market. However, it would appear that the worst is over, and that traders are building up again. BTC will have to break the polarity zone around $30,000.
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