Key Points
- Bitcoin’s medium-term holders are increasing their accumulation of the cryptocurrency.
- Historical data suggests Bitcoin may see a period of sideways movement before a significant rally.
The market for Bitcoin (BTC) is currently seeing an increase in accumulation by medium-term holders. These are individuals who have held their Bitcoin for a period ranging from six months to seven years.
CryptoQuant analyst SignalQuant has noted this trend in a recent report. According to SignalQuant, this change in behavior among Bitcoin holders, despite the cryptocurrency facing resistance at the $70,000 price level, suggests growing confidence among these investors. It indicates that they are choosing to hold onto their Bitcoin rather than selling.
Historical Context and Current Market Conditions
Looking back at Bitcoin’s performance history, SignalQuant points out that a similar pattern of accumulation was observed among Bitcoin’s medium-term holders in the third quarter of 2019. At that time, the price of Bitcoin moved sideways for over six months before eventually experiencing a rally.
This historical context may provide insight into the current market conditions. It suggests that Bitcoin may undergo a similar period of sideways movement before a significant uptrend occurs.
Technical Indicators
An analysis of Bitcoin’s key technical indicators on a 1-day chart shows that price consolidation is already happening. For instance, the leading cryptocurrency is trading close to its 20-day exponential moving average (EMA). This average represents Bitcoin’s average price over the past 20 days, and the cryptocurrency has been trading in this manner since May 23.
When Bitcoin trades close to its 20-day EMA, it suggests a period of consolidation, with neither bullish nor bearish forces dominating the market.
Additionally, Bitcoin’s declining Average True Range (ATR) supports this observation. The ATR, which measures an asset’s price volatility, was 2520 at the time of writing, a decline of 21% since the beginning of May. A decrease in the ATR value indicates that recent price movements have been within a narrower range than the previous period.
