Bitcoin Price Analysis: BTC Sits On Top Of Near 2-Month Trending Line

Last Updated July 23rd 2021
4 Min Read

Daily Bitcoin BTC Price Forecast
  • Bitcoin price flipped both the 20-day and 50-day SMAs from support to resistance.
  • The MACD shows increasing bearish market momentum.

The Bitcoin price reached a peak of $61,200 on March 14. Since then, the premier cryptocurrency has been under heavy bearish control dropping to $53,675, as of writing. The worrying thing is that BTC has dropped to the near 2-month upward trending line. Break below this level could be a significant win for the bears.

Bitcoin Price Flashes Multiple Sell Signals

The daily Bitcoin price chart has flashed three different sell signals.

  1. The MACD shows increasing bearish market momentum.
  2. The 20-day and 50-day SMAs have flipped from support to resistance.
  3. The parabolic SAR has reversed from positive to negative.

btc/usd daily chart 032321

Image: BTC/USD daily

On the downside, breaking below the trending line will take BTC to the 50-day SMA ($50,000)m wherein 808,500 addresses had purchased nearly 370,000 BTC tokens. On the upside, the most sigjnificant resistance is at the recently flipped 20-day SMA ($56,000), wherein a million addresses had purchased almost 565,000 BTC tokens.

btc/usd volume chart 032321

Image: IntoTheBlock

Bitcoin Supply Distribution

Glassnode Chart

Well-known analyst "@_Checkmatey_" shared the above chart and noted that Sat Stackers, or people who regularly accumulate Bitcoin, now own 5.2% of all Bitcoin supply.

“Stacking Sats went into full effect in March 2018. Over past three years, Addresses holding less than 1 $BTC accumulated 1.23% of circulating supply. Sat Stackers now HODL 5.2%of all miner #Bitcoin supply.”

Central Bank of Nigeria Denies Crypto Ban Rumours

The Central Bank of Nigeria (CBN) has recently denied rumors of a general crypto ban. According to a Today Ng report, the CBN merely distinguished crypto-related banking activities and the use of cryptocurrencies by the population.

Nigerian traders have total freedom to transact with crypto as long as they are not being used for illegal purposes. Adamu Lamtek, the Bank’s Deputy Governor, said: 

The CBN did not place restrictions on the use of Cryptocurrencies, and we are not discouraging people from trading in it. What we have just done was to prohibit transactions on Cryptocurrencies in the banking sector. 

The explanation comes in response to nervousness that surfaced after the CBN issued a letter, which went viral. The institution had instructed all banking entities in Nigeria to close all accounts used by persons operating or using crypto exchange services. 

The Bank hereby wishes to remind regulated institutions that dealing with cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited. Accordingly, all DMBs [deposit money banks], NBFIs [non-bank financial institutions], and OFIs [other financial institutions] are directed to identify persons and/or entities transacting in or operating cryptocurrency exchanges within their systems and ensure that such accounts are closed immediately. 

The statement caused some confusion among crypto holders in Nigeria. Later, however, the bank clarified that dealing with crypto was prohibited for banks, not for the general population of Nigeria.

Long-Term Investors Continue HODLing Bitcoin

Bitcoin’s liquid supply has been declining in recent times. Only 36% of circulating BTC has moved on-chain in the past six months. According to Glassnode, the peak of the 2017 bull market saw 50% of Bitcoin’s supply circulating within the preceding six months. 

Glassnode Chart

“In bull markets old coins tend to move more. This increases the relative supply of younger coins in the network. At previous $BTC tops, around 50% of the #Bitcoin supply was younger than 6 months. We are currently significantly below this level (36%).

According to this data, some long-term investors are likely to be tempted to sell their Bitcoin at current price levels. This suggests that Bitcoin whales are hodling for higher prices and the current bull-trend could continue for a while.

When prices hit new peaks, older coins are typically sold for profit. However, this trend appears to be decreasing, suggesting that investors would hold on to their assets instead. The current supply of BTC is 18.66 million (88.85% of the 21 million limit). A fifth of all BTC has reportedly been lost or stolen, suggesting the actual circulating supply of Bitcoin is considerably lower, bolstering the scarcity of the asset.

Analyst Willy Woo shared Glassnode data, which noted significant on-chain activity while Bitcoin’s market cap surged past $1 trillion. 

Glassnode Chart

"URPD: "7.3% of bitcoins last moved at prices above $1T" This is pretty solid price validation; $1T is already strongly supported by investors. I'd say there's a fair chance we'll never see Bitcoin below $1T again. It's only been 3 months since Bitcoin broke the $19.7k  all-time-high of the last macro cycle. But already 28.7% of bitcoins moved at prices above $19.7k."

The data, which illustrates UTXO Realized Price Distribution (URPD), tracks Bitcoin’s unspent transaction outputs at different prices. Woo noted that on-chain coin movements do not always indicate active trading, with exchanges regularly shifting their digital assets internally.

Bitcoin Price Is Expected To Reach These Levels

Bitcoin price needs to hold above the trending line. A break below that will take BTC to 50-day SMA, which also coincides with the $50,000 psychological level. It will be interesting to see if the buyers use that level to buy back into the market.

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