Bitcoin Price Re-tests $22.8K Key As Metrics For ‘BTC Purchase’


Bitcoin (BTC) returned to basics on Aug. 4 as higher levels gave way to a battle at the 200-week moving average (MA).

BTC/USD 1-hour candlestick chart (bit stamp). Source: TradingView

Battle for classic Bitcoin price trendline rages on

Data from TUSEN Markets Pro and TradingView showed that BTC/USD fell to repeatedly test the bear market’s key trendline as support.

Wall Street’s opening that day caused only a brief swing of mood, with the pair peaking above $23,000 before continuing its previous behavior.

The mood was left unchanged by the news that investment giant BlackRock has partnered with major exchange Coinbase to provide crypto trading to clients.

Instead, the familiar status quo regarding the 200-week MA just above $22,800 entered another chapter, with bulls and bears still vying for control. On-chain analytics resource Material Indicators noted that a class of whales trading on the largest global exchange, Binance, was in a riskier mood that day.

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“The purple class of whales has historically had the most influence on Bitcoin price action,” it says wrote on Twitter next to a chart with data from the Binance order book.

“Interesting to see how they pump in other classes.”

BTC/USD buy and sell levels (Binance). Source: Material Indicators/Twitter

Support was thin near the spot price, the chart showed, with more substantial bid interest rates of only about $22,400 in the event of a breakdown. The resistance, meanwhile, built up at $23,400.

“A lot of chopping here on lower timeframes, but with this local sweep of the highs, we finally seem ready to hit that flush in downside targets,” meanwhile popular trader Credible Crypto added in his latest prediction on August 3.

“Looking for a higher low and a reversal to continue towards 25k+ $BTC.”

Buying data hints of an impending BTC supply shock

In addition, in terms of buyer interest, on-chain data showed a marked increase in the proportion of total BTC that became illiquid.

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Originally created by William Clemente, chief insights analyst at Blockware and statistician Willy Woo, the Illiquid Supply Shock (ISS) ratio metric saw what popular Game of Trades commentator called a “huge peak” in July.

ISSR increases when BTC is primarily withdrawn from circulation, which in turn increases the likelihood of a price increase based on demand exceeding supply.

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“The HODLers have gone on a shopping spree like nothing seen since 2018,” Game of Trades noted on the day, uploading SSR data hosted by on-chain analytics firm Glassnode.

Bitcoin Illiquid Supply Shock ratio annotated chart. Source: Games of Trades/Twitter

Glassnode, meanwhile, noted that hodlers were still massively selling more BTC at a loss than at a profit, but that demand is also set to increase at the moment.

“This is typical of bear markets, and a turnaround is often associated with an upturn in demand,” it says commented on a chart of realized gains and losses per day.

Bitcoin realized profit and loss annotated chart. Source: Glassnode/Twitter

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