What's Next For Bitcoin? Golden Cross, Fundamentals Spur Bullish Dreams

Bitcoin BTC/USD saw a major price correction this month. What's next for the world's first cryptocurrency?

What Happened: Looking at the daily chart, the coin has been consolidating over the 0.5 Fibonacci level at $46,700 for a couple of days without pointing to any clear direction. The coin also recently touched on the Ichimoku bullish Kumo, which is now acting as a support level situated at the $45,500 price.

The 50-day and 200-day moving averages have drawn a golden cross on the chart on Wednesday, while William's Alligator shows indecision. Similarly, the RSI standing at just under 51 also does not point towards any clear direction. Despite that, the on-chain fundamentals paint a much clearer story for those looking from a more long-term perspective.

Glassnode's chart reporting the Bitcoin balance on cryptocurrency exchanges shows that only 13% of the coin is currently held on cryptocurrency exchanges. This is the lowest this metric has ever been since early February 2018. As expected, also data concerning the flow from and to crypto exchanges shows a net outflow of Bitcoin from their wallet addresses.

See Also: What Is Bitcoin, and How Does it Work?

The chart also shows that the number of accumulation addresses is in a clear and sharp uptrend and has not taken a hit since the beginning of May when Bitcoin's price was still very much near its high and trading at nearly $58,000.

The MVRV Z-Score shows that Bitcoin is still very much far away from the red zone and has been since mid-May when it was trading at over $60,000. Similarly, the Puell Multiple also shows that the coin is rather far away from the red zone and safe from miners selling the coin into a major downtrend.

The percentage of on-chain addresses currently profiting off of their investment stands at nearly 93%, a dangerously high score near the red zone starting at 95% — not reached since mid-May when Bitcoin was trading at about $57,000.

The idea behind this metric is that with more investors profiting on their position, there is the probability of them selling en masse to rake in their newly found riches and crashing the prices also increases. The Bitcoin futures open interest also shows a local peak which usually anticipates a short-term crash that does not impact the long-term trend.

Photo: André François McKenzie via Unsplash