Search ForexCrunch
  • BTC/USD broke below another key support, more pain in sight.
  • Chainalysis shows that market positioning barely changed in summer.

Bitcoin bears have had just about enough. Now they are going to bite back, pushing BTC/USD right to where it started its recent rally. Currently, the digital currency No. 1 is changing hands at $6,390 with only 1.8% 7-day gains, threatening to dive deeper towards the Asian low of $6,363 and to $6,300.

Cryptocurrency market positioning insights

The New-York based startup Chainalysis analyzed large Bitcoin wallets and came to the conclusion that the number of Bitcoins controlled by long-term investors and short-term market speculators barely changed in summer, which means that both groups of market players preferred to hold their positions.

As of the end of August, investors held 6.4M coins (30%), speculators retained 4.8M coins (23%), while about 29% of the total issuance is either lost forever or not mined yet.

It is worth noting, that at the end of November 2018 the long-term. Investors or so-called HODLers had three times as many coins as speculators, but in the April 2018 the number of coins available for trading increased up to 58%, which enhanced the downside pressure on Bitcoin’s price, according to the startup.

“Our updated data covers a few more months, through August 2018, and reveals marked stability in each of the monetary aggregates. As shown below, all the monetary aggregates have been extremely steady over the summer months. Specifically, the amount of bitcoin held for speculation (M0) has remained stable between May and August at around 22% of available bitcoin. Similarly, the amount of bitcoin held for investment remained stable during the summer at around 30%,” the report authors said.

Bitcoin’s technical picture

From the technical point of view, BTC/USD broke below 23.6% Fibo retracement level from the downside movement from September 4 peak, which darkens the technical picture. If the coin fails to regain ground above $6,400 any time soon, the sell-off may continue with the next aim at $6,6338 (September 20 low) and $6,200.

On the upside, we need a move above $6,500 and $6,580 (Asian high). This will allow proceeding towards $6,650. This area is guarded by SMA5 – daily and 38.2% Fibo retracement, with the next upside hurdle seen at $6,717 (Monday’s high).

BTC/USD, 1-hour chart