All on-chain data signals a bullish scenario for BTC

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Bitcoin price continues to trade in a tight range near $16.7,000 as investors continue to assess the outlook for monetary policy and economic growth in 2023. US manufacturing PMI data, the latest Federal Reserve policy meeting minutes on Wednesday, and the December jobs report on Friday.

Meanwhile, the US Dollar Index (DXY) recorded an increase of 0.63% on Tuesday, rising above 104 again. As a result, volatility in the crypto market can be seen this week, which will decide the direction of Bitcoin price in the coming weeks.

Total crypto market volume increased by 14.02% in the last 24 hours. Bitcoin price will remain under pressure this week, while most of the upside push will come from altcoins.

Bullish On-Chain Data Signal Scenario for Bitcoin Price

According to on-chain analysis, the January 2 Taker Buy/Sell Ratio (30DMA) data again generated a buy signal for Bitcoin. This is the fourth time a buy signal has been shown by the metric.

Bitcoin – Taker buy/sell ratio (30DMA). Source: CryptoQuant

Taker Buy/Sell Ratio (30DMA) is one of the best metrics to identify a buy cycle. However, this only applies in a bull market. In times of instability or a bear market, this indicator almost perfectly generates only sell signals. Therefore, one should confirm buy signals with other short-term on-chain indicators in accordance with the trading strategy.

As the Taker Buy/Sell Ratio (30DMA) generated buy signals for Bitcoin four times during the bear market. Russia’s invasion of Ukraine, the Terra-LUNA crisis, and the collapse of FTX have only had a negative impact on Bitcoin price action in 2022.

However, the 4th buy signal is likely a bullish call, as the BTC SOPR MA30 data indicates that the possibility of the BTC price turning bullish in 2023 is quite high. Investors can adopt the DCA strategy to accumulate Bitcoin at lower levels, as experts believe that institutional investors and whales will start a rally at any moment.

Can Bitcoin go bullish now?

Popular analyst Michael van de Poppe believes that the Bitcoin price may rise above $17,000 in the coming days. BTC price will continue to hold strong above the crucial $16.5,000 support level.

Bitcoin price within 1 hour. Source: Michael van de Poppe

According to the technical indicators, the price of BTC is moving within the Bollinger Squeeze bands and the RSI is rising. Thus, the price of BTC will continue to move sideways until the end of the squeeze.

Also Read: This Bullish Pattern Strengthens BTC to Escape Dormant Market State

Varinder is a technical writer and editor, technology enthusiast, and analytical thinker. Fascinated by disruptive technologies, he shared his knowledge on blockchain, crypto-currencies, artificial intelligence and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for a substantial period of time and currently covers all the latest updates and developments in the crypto industry.

The content presented may include the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.

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