Is The BTC Bottom In? These Data Points Suggest That It Is!

Published in

Coinmonks

4 min readApr 27, 2021

In this issue, we take a deep dive into both on-chain and technical data which, when seen in aggregate, suggest that bitcoin might have bottomed out.

Let’s dig in.

BTC on-chain analytics suggest BTC bulls are not spent

A glance at on-chain indicators, specifically bitcoin’s adjusted Spent Output Profit Ratio (aSOPR), suggests that the bulk of this correction has come to an end. In fact, the long-term aSOPR suggests that the trend is still in tact.

Check out the full article here!

Has bitcoin bottomed?

BTC/USD trades above $53,000 shortly after printing a local low at $47,000.

As noted in the telegram channel, a 4-hour relative strength index (RSI) divergence suggested that selling pressure reached a relative short-term peak. However, BTC/USD is not out of the woods yet.

In order for bullish confidence to re-enter the market, pivotal levels must be reclaimed and held with conviction. At the time of publishing, the pair is wrestling with the $53,000 resistance level.

Should the relief rally show promise, aggressive bulls will target liquidity levels between $56,000 — $57,000 before potentially cooling off.

On the flip side, a rejection / fakeout from $53,000 would re-open downside targets, namely the 20-weekly EMA ($45,000) and potentially lower levels (due to a mass liquidation event).

That said, it’s not improbable for the pair to steam roll higher without testing this moving average under present circumstances.

As noted earlier, important on-chain metrics which typically signal a reversal have reset — so unless BTC/USD enters into bear-market territory then continuation higher is more likely. Since a new bear market would require a fundamental shift, which is by no means apparent, it’s useful to treat this data as usual.

Additionally, the crypto fear and greed index shows that confidence in the market hasn’t been this low in 2 months. While it’s not particularly reliable, at extremes this index is a useful counter indicator which provides confluence alongside other data points.

Is Ethereum ready for $3,000?

Meanwhile, ETH/USD has so far managed to avoid a catastrophic meltdown.

For months now, we’ve been highly bullish on Ethereum, which has not gone parabolic yet.

Unlike bitcoin, which broke market structure, Ether held above the $2,130 (breakout level) during the downturn, testing the neckline multiple times.

The fakeout / deviation is also largely recaptured as ETH/USD prints higher prices above a bullish pennant structure. Consolidation patterns tend to break out in the direction they formed, so it’s technically reasonable to expect higher prices now that a market-wide recovery is in play.

A measured move calculation places ETH at $2,883 (currently $2,517). Taking into consideration the broader fib-extension trend in the event of highly bullish price-action, then ETH/USD could hit the 1.618 fib extension at $3,456.

On the other hand, if price re-enters the pennant structure, then the broader trendline is the next level of interest ($1,850) for bulls.

Naturally this is not a science and there is no such thing as risk-free capital gains. As of Monday morning though, the market appears to be enjoying a strong relief rally which could develop into a larger trend reversal. Once BTC takes out $58,000 decisively, we can put on our bull hat for good.

Either way, the bull run is not over, and patience is a virtue.

Catch you next time.

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