Bitcoin Onchain Analysis 01.05.2023

Onchain analysis is the examination of data stored on the blockchain network and allows us to see what users are doing and how they behave on the blockchain. This data includes block details, transaction data, and smart contract information.

Users who buy bitcoin in the range of $26900-$28515 on Onchain seem to be highly profitable. Users with a cost of $28600-$30270 seem to be at a loss. The larger the red spheres and the smaller the green spheres, the higher the chance of rise. The larger the green spheres and the smaller the red spheres, the higher the probability of a drop. The level ranges where the orbs are located can work as strong support or strong resistance.

Bitcoin has experienced a rise after its movement between the green and blue bands in the past, and then it rose up to the orange band. There is no certainty, but if the current price action is the same, today’s orange resistance is $47900The support band price is $19970.

In Bitcoin, profitability for miners is a function of Bitcoin price and the miner’s cost of purchasing electricity to mine. Some miners hold a large number of Bitcoins to sell in the bull market and make much more profit or to survive the bear season. However, in a bearish scenario, miners who cannot earn much and have to sell their Bitcoins have to stop their mining activities. Miners who holding Bitcoins may want to sell their Bitcoins at a loss to force other miners to leave the network. However, this could lead to what is called a “death spiral” in Bitcoin. A death spiral is a steady decline in price. Of course, the price will turn upside down at some point, but in the process, many miners stop mining.

The Active Address Sentiment Indicator data appears to be in the mid-band resistance region. Overall, the bitcoin price is currently at an intermediate value and remains unstable. If the decline continues, we will follow the support zone along with the important price levels.

The Cycle Repeat chart takes the price movements of the last 1458 days and repeats these movements every day for the next 1458 days to forecast the price. When the orange band crosses the blue band upwards, it is bull season, and when the orange band cuts the blue band downwards, it is bear season. It looks like there will be a band crossover again in the coming days or weeks. We will be watching how the Bitcoin price reacts when the band crosses.

Bitcoin has experienced a rise by throwing itself above the orange band after the price action under the orange band in the past. In 2016-2018, the green band and the orange band rose together in parallel and the bull season was experienced. However, between 2019-2020, the Green band has been a strong resistance and bear season has been experienced. According to the current chart, the orange band support is at $25000 and the green band resistance is at $44315. We will be following which scenario will work.

The level that Bitcoin must hold to maintain its bullish structure is $23985. It is expected to exceed the $37070 level in order to make even more sharp rises. If there is a deep bear season again, the level to watch is now $11992.

You can check out our Onchain Data and Explanations article.

Onchain analysis consist of data from blockchain markets, and only reflects bitcoin inflows and outflows to exchanges. These may be interpret both positive or negative, but does not include a certain market outlook whether bullish or bearish. All analysis shared above is for educational purposes, this post does not include any financial advice.

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