On-Chain Data and Technicals Signal Further Gains for Bitcoin

Key Takeaways

  • January 2018 highs are the next significant technical resistance barrier. 
  • On-Chain data shows a steady rise of market participation in the last seven days as traders remain confident about the ongoing bull market.
  • The “Williams Alligator” indicator continues to generate a strong buy signal on the daily and weekly time frames.

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Bitcoin continues to prove its undeniable value as an alternative treasury asset, as the cryptocurrency rallies in the face of election uncertainty and broad-based weakness in the U.S. dollar.

Bitcoin Bulls in Full Control

Federal Reserve Chairman Jerome Powell’s latest remarks on the weakening U.S. economy also helped to accelerate the ongoing upside breakout, as the pioneer cryptocurrency fast approaches a 33-month trading high.

Volumes on the Bitfinex exchange over the past 24 hours peaked at$400 million for Bitcoin pairs and$110 million for Ethereum pairs.

Paolo Ardoino, CTO at Bitfinex, shared with Crypto Briefing: 

“The spike we’ve also witnessed in Ethereum trading volumes over the past 24 hours is spectacular in a year where it has powered so much innovation in the digital asset space. As Tether’s market capitalization breaches the$17 billion mark, it could be said that the age of cryptocurrency has well and truly begun.”

Looking at the weekly and daily timeframe, traders have noted the remarkable growth from the last week of October to the first week of November. Many market participants wonder whether the run higher in BTC has happened too fast without a meaningful price pullback.

The “Williams Alligator” indicator, a key trend following indicator used by traders, is allaying fears about BTC being overstretched at current levels. The metric continues to issue strong buy signals on both the daily and weekly time frames.

The indicator shows that the current trend remains positive on a weekly basis as long as the price trades above the $12,000 level. Likewise, if BTC can continue trading above the $14,150 level on the daily time frame, bulls will stay in control. 

Trend continuation can be identified when the five-day period moving average crosses over the 8 and 13 moving average to the upside. 

Additionally, the widening gap between the five-day moving average on the weekly chart and the 8 and 13 moving averages also signifies strength in the prevailing trend.

On-chain data analysis for BTC is equally bullish and shows growth as the Net Value Transaction ratio (using transaction volume) spikes to new yearly highs. 

The NVT ratio often presents a very accurate bullish forecast in predicting breakout price movements for digital assets. 

On Nov. 2, a spike in Daily Token Circulation was followed by a steady rise in the NVT ratio, showing a rising interest in Bitcoin. A price breakout above the important $14,000 resistance level confirmed this metric’s reading.  

Given Bitcoin’s ongoing technical, on-chain, and fundamental strength, it is increasingly likely that we could see a coming push higher to the all-time highs before a meaningful pullback occurs.

However, if Bitcoin fails to break above January 2018 highs, around the $16,100 level, then a sharp retracement may take place towards at least the $14,000 area. This is because traders would likely liquidate their position in expectation of a sharp near-term pullback before entering back in at a more attractive level.

For more insights like this and much more, let the experts from our research team help you find the best crypto investments and trade ideas.

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