BTC price sees 6% correction in contrast to booming Bitcoin on-chain data
A cooling-off period is welcomed by traders who were already in moderate shock at the veracity of last week’s 10-green-daily-candle surge.
Bitcoin (BTC) dipped below $39,000 on Aug. 2 in what traders had long predicted would be a necessary reaction to recent gains.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Bitcoin needs to hold mid-$30,000 zone
After a successful weekend turned less optimistic, the start of the new week saw mixed activity as Bitcoin bulls faced off with the prospect of fresh FUD from regulators.
For Cointelegraph contributor Michaël van de Poppe, a comedown was nonetheless not just likely, but necessary.
“Given the vertical move that we’ve had, it would be very surprising if we just continued moving towards $48,000, as that is the next point of interest,” he explained in a fresh YouTube update.
Van de Poppe noted that low volumes on the rise to local highs above $42,500 fuelled the argument that such levels constituted a “fakeout.”
Should downside take hold more convincingly, $38,500 has formed a potential bounce zone, with the area between $34,800 and $36,000 critical to hold as support, he added.
At the time of writing, BTC/USD was back above $39,000, still down around 5.6% over the past 24 hours.
On-chain numbers “retrace the dump”
Despite volumes remaining low for supporting a bullish advance, meanwhile, on-chain data showed a return to form among Bitcoin entities at large.
As noted by Lex Moskovski, chief investment officer of Moskovski Capital, average weekly active Bitcoin network entity numbers were back at levels last seen before the May BTC price drop.
Bitcoin active entities 7-day moving average chart. Source: Lex Moskovski/Twitter
It’s not the only metric to have “erased the dump,” as Moskovski called it — strong hodler command of the BTC supply has also rebounded strongly, with illiquid supply hitting all-time highs.
In additional good news, the entire realized cap of Bitcoin was growing again as August began, something stock-to-flow model creator PlanB suggested was a bullish event.
#bitcoin realized cap is rising again! Realized cap is the average price at which all 18.77M BTC were last transacted (calculated over all utxo’s). Also, the few sellers at the moment sell at a profit (not a loss like in May and June). IMO this is bullish. pic.twitter.com/q3mhSZ19oH
— PlanB (@100trillionUSD) August 1, 2021
As Cointelegraph reported, in June last year, realized cap reversed losses caused by the March coronavirus crash, going on to unleash the current bull market.