The Capital
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The Capital

A Stone’s Throw Away from Price Discovery

Bitcoin is a stone’s throw away from all-time highs, just as 99% of the circulating supply exchanges hands in profit. As the crypto inches closer to price discovery, the question on everyone’s mind is where to buy bitcoin in the event of a much-desired pullback scenario.

Let’s dig in.

99% of Circulating BTC Supply is In Profit

The world’s most valuable cryptocurrency witnessed a strong rally in the first two weeks of October. In fact, Bitcoin is up more than 40% since the start of the month.

Due to the rally, the vast majority of the overall Bitcoin supply has turned profitable, according to data from leading on-chain analytics firm Glassnode.

Check out the full article here!

Technically speaking

A stone’s throw away

Bitcoin is close to all-time highs, currently trading above $61,100. The coin hasn’t shown signs of weakness on the daily time frame despite futures data signalling a potential overheating scenario in the making.

According to the projection we’ve been following for the last couple of weeks, BTC/USD could enter a short period of consolidation in the near future, which typically lasts between one or two weeks in fast-moving bull markets. As any trader/investor worth his salt will tell you, there’s no such thing as a perpetually vertical market and that pullbacks are both healthy and desirable to build a strong floor.

Currently, the skies are clear for price discovery, and since this would be unchartered territory by definition, literally anything is possible in terms of upside potential.

That said, in the event that $60,200 fails to hold up as support, then bulls will look to maintain the daily uptrend at the 20-daily EMA at $55,130. Every day, the moving average trends higher, so more time spent grinding higher would technically increase the floor price where buyers are expected to step in.

On the daily time frame, the Relative Strength Index is within overbought territory above 70. However, the lack of divergences suggests that buyers are still firmly in control of the market, and in a macro breakout, RSI signals are often less relevant than in a ranging market. On the other hand, perpetual futures funding rates are positive, setting the stage for a potential systemic risk event to the downside if price-action falters. Notably, though, funding rates are far lower than they were in April when BTC prices were also above the $60k mark.

All in all, while it’s prudent to expect the market structure to create a trading range sometime soon (brief as it might be), BTC/USD remains within a strong bullish uptrend at the time of publishing. Regardless, bitcoin’s vertical price history since the start of the month sets a precedent for tight invalidation levels in order to protect capital and deploy it when conditions are more favourable.

Tests and deviations below the 20-daily EMA are buying opportunities until proven otherwise.

Catch you later.

p.s. This is my opinion. You can have your own opinion.

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Christopher Attard
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Chris on Crypto

Chris on Crypto


Journalist-turned crypto-writer & analyst; forging the narrative, stacking sats.