Plan C’s latest Bitcoin on-chain data should get crypto investors bullish on what’s to come for the overall market. Covered: Bitcoin Traders Finish Taking Profits Weak Hands Capitulated Bitcoin Price Action Update The crypto markets are looking green after the Federal Reserve meeting on Wednesday. After dropping down to a low of around $46,500, Bitcoin […] The post Plan C Drops Fresh Bitcoin On-Chain Data That Signals Incoming Bullish Rally appeared first on CryptosRus.

Plan C Drops Fresh Bitcoin On-Chain Data That Signals Incoming Bullish Rally

Plan C’s latest Bitcoin on-chain data should get crypto investors bullish on what’s to come for the overall market.

Covered:

  • Bitcoin Traders Finish Taking Profits
  • Weak Hands Capitulated
  • Bitcoin Price Action Update

The crypto markets are looking green after the Federal Reserve meeting on Wednesday. After dropping down to a low of around $46,500, Bitcoin (BTC) has flipped green and pulled up the overall market. Although Plan B may have missed his November price prediction of $98,000, crypto analyst Plan C is here to save the Bitcoin bull market with a fresh set of Bitcoin on-chain data from the blockchain analytics provider Glassnode.

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Bitcoin Traders Finish Taking Profits

The first metric from Plan C shows how the Bitcoin price typically reacts once market participants finish taking their profits (indicated by the blue level).

Plan C uses the 3-day moving average to show realized profits.


The data suggest that when we get high amounts of profit-taking (realized profits,  it naturally creates a lot of resistance to overcome and historically results in a price correction.

Basically, new FOMO buyers are overcome by a larger group of profit takers.

It also shows that most smart money dollar-cost averages (DCAs) are out of the market after big moves up throughout the cycle. 

Bottoms typically come or are near when people selling at a profit have taken desired profits or no longer want to sell and take profits at the current or lower price level, so we see profit taking or realized profits grind to a halt.

This makes it a lot easier for the market to bounce back higher once the capitulation/realized losses dry up.

Weak Hands Capitulated 

The next Bitcoin on-chain data from Plan C gives us a good look into the current state of market emotions. The capitulation level reflects how the market is feeling and the corresponding amount of losses realized by market participants during that time.

When the zone is red, this represents low confidence in the Bitcoin market and, thus, high capitulation levels. Yellow indicates medium or average market confidence, and blue means that confidence is high, so no one is selling either.

It’s interesting to note the initial spike in capitulation level after the market-wide sell-off in May and the tapering off that followed. As Bitcoin came closer and closer to a bottom, the declining level of realized losses shows that investors were getting more confident in the market recovering.

Looking at the most recent capitulation, we can note another initial spike in realized losses. Still, that level has quickly returned to the yellow zone, meaning that investors are starting to feel better, but we still need a bit less selling to bring that confidence back to the blue zone. 

Plan C thinks that if the on-chain data can align between these two charts, meaning that both realized profits and realized losses reach their corresponding blue zones, that gives Bitcoin a much higher probability of seeing further upside in the future.

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Bitcoin Price Action Update

Taking a look at the front end, Bitcoin is looking good but still needs some more momentum before feeling confident about seeing further upside.

At the time of writing, BTC is trading at $48,403.


Bitcoin has been holding strong on this longer-term support line from its April highs; however, it still needs to clear resistance in the short term before we can start feeling more confident in an upwards rally. 

I think it’s important to note the relative strength index (RSI), which measures an asset’s overbought and oversold conditions. Despite the price being held under short-term resistance, the RSI has flipped resistance into support. When I typically see this discrepancy between price and RSI, I picture Bitcoin like a ball that’s being held underwater.

The post Plan C Drops Fresh Bitcoin On-Chain Data That Signals Incoming Bullish Rally appeared first on CryptosRus.