Analyst on Bitcoin: This is ‘a very strong sign of…’

For one whole day, after some pretty monotonous consolidations and devastating price dips, Bitcoin price candles were green on a one-hour, four-hour, and one-day chart. With this latest movement, market speculations were rife if this rally was here to stay.

In the case of Bitcoin, its price has been affected by external news in the past. Some consider these factors to be driving forces to the price action and during BTC’s recent bull run the news side of it looked positive. News like Binance and FTX  limiting leverage trading and Binance possibly doing an IPO in the US might have contributed to the same. On the other hand, many in the space have also claimed that Bitcoin suffered its recent mini price drop because Amazon denied the news about accepting Bitcoin. 

Bitcoin recovered and after the slight drop, pulled back to $39K at press time. This price action and the anticipation of a sustained bull market has left everyone analyzing every move of the asset, including trader and analyst Scott Melker. In a recent video Melker pointed out that, on a monthly chart, Bitcoin made a potential hammer candle for this month which would be ‘a very strong sign of reversal,’ looking at the demand shown in the last three weeks. About the generated demand, he further said:

“There’s a lot of indecision and a bit of weakness by bears to be able to push the price down. Every time they’ve tried to push down there’s been a tremendous demand coming in. There was low volume this month, but maybe that will pick up coming up.” 

On a daily chart, Melker noted the Bitcoin’s price had broken past the descending channel where it had been consolidating for long. Likewise, on a four-hour chart, its price breached the descending triangle which too was a sign of a reversal.

One-day chart. Source: Scott Melker Youtube

However, these aren’t technical signals and it is worth noting that some metrics like development activity and percentage supply held by whales weren’t holding too well amid this price rally. Development activity was the lowest in a month while the percent of stablecoin total supply held by whales with more than 5 million USD also saw a dip making it the lowest this month. On the contrary, a good activity on the network was shown by the spike active addresses. 

Source: Sanbase

According to Melker, “Bitcoin bulls showed up and pushed bitcoin price up massively.” Analyst Willy woo was also quick to point out the $1billion of BTC futures liquidations in just 12 hours.