BTC approaches $ 50,000 with strong weekend rally

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BTC has shown signs of strength in the near term, particularly after recovering the moving average of 200 on the 4-hour chart and holding $ 47.2,000, a key support level.

What is remarkable is that Bitcoin has managed to maintain its support despite the selling of global stocks with the rising dollar. In the short term, BTC has managed to recover the critical 200-day, 21-day moving average, 21-day exponential moving average, and 200 moving average on the 4-hour chart. This is quite impressive considering that global stocks have sold.

Chart by TradingView Strong Hands Don’t Sell

The short-term positivity is likely due to the continued strength of on-chain metrics, especially with strong hands holding large amounts of older coins while younger coins sell out. The market is profitable again according to the adjusted SOPR metric – a positive signal as BTC tested a breakeven point in the 45,000 range earlier this week.

Open interest was kicked out the day El Salvador adopted Bitcoin as legal tender, consolidated, and recently started to rise. Funding rates have been neutral to negative throughout the recent rally, indicating that shorts are skeptical of the recovery. The more the price increases, the more the shorts will be forced to hedge.

Average coin age, a chain metric that we follow closely, continues to hit new all-time highs, a strong signal that long-term holders are continuing the re-accumulating phase and are not selling. Previous cycles with similar behavior have led to larger, larger rallies, prompting long-term holders to start splitting in strength.

Chart by CryptoQuantDistribution expected as price rallies

A long-term distribution from holders at higher prices, particularly above all-time highs, can be expected if BTC completes the validation phase of the continuation of the bull market in the coming weeks with a breakout above resistance between $ 55,000 and $ 58,000. Breaking above these levels will likely send BTC to a retest of all-time highs at $ 64.8,000, where there is very little chain resistance.

When breaking to new all-time highs we can expect a significant upside which will likely encourage some long term holders to start dealing. Keep in mind that long-term holders have historically distributed their holdings when the price increases significantly and especially when older coins are profitable.

The $ 30,000 crash from May to July had no impact on long-term holders because they remained profitable. CryptoQuant chain analyst Gaah Cordeiro notes that they don’t sell at a loss during bull markets. The LTH SOPR metric remained above 1 throughout the $ 30,000- $ 40,000 consolidation, confirming that LTHs are profitable, strongly suggesting that Bitcoin is not in a bear market.

Overall, the trend of fundamentals and chain measures continues to strengthen and suggests higher prices, particularly in the coming weeks and months. In the near term, there are external signs of caution such as the risk on global equities, uncertainty over the Federal Reserve’s cut, the dollar rising and fear of the $ 300 billion debt crisis. of Evergrande.

Despite the short-term pressure, Bitcoin continues to show strength as strong hands continue to hold and refuse to sell BTC at current prices. If this uptrend continues, we can expect a potential move towards $ 50,000 next week as BTC attempts another breakout.

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