Bitcoin continues to show resilience near its all-time high, with new on-chain data suggesting that there may still be room for the gathering to be extended.
A July 17 analysis by Cryptoquant contributor DarkFost shows that prices could continue to rise before they reach significant resistance. The focus lies on a subset of investors who have purchased Bitcoin (BTC) in the past few months, known as short-term holders.
A common way to track their actions is to compare the realised value ratio through market value and the market price of Bitcoin with the average price paid by these holders. The MVRV ratio is used to measure the profits that short-term holders are sitting on.
Historically, if these short-term holders’ unrealized profits rise to around 35%, they tend to lead to sales. It usually results in a short-term pullback. In past cycles, this threshold was lined up with an MVRV read of approximately 1.35.
Currently, that number is close to 1.15. Simply put, short-term holders have not yet sat in the kind of profit that has caused major sales in the past. This allows Bitcoin to increase by 20% to 25%, before hitting its familiar turning point.
This shift can be largely due to realised prices, or the fact that the average price paid by short-term holders has recently exceeded $100,000. As of this week, it has already exceeded $102,000. Its high base makes it difficult to reach the same level of unrealized profits as quickly as in previous cycles, and Bitcoin offers more breathing chambers.
Bitcoin recovered well after slipping after the latest US inflation report. It fell to about $116,000, but then bounced back. At the time of writing, it is trading at around $118,600, just 3.6% below the record high of around $123,000 set on July 14th.
Despite the price recovery, activity in the market has slowed down. Daily trading volumes exceed 22%, indicating cooling momentum. In the derivatives market, data from Coinglass shows a slight decline in profits, with a 16.3% drop in volume. This suggests that traders are taking a more cautious approach in the short term.
From a technical standpoint, Bitcoin is integrated just under the upper Bollinger band, which costs around $122,151. At 69, the relative strength index is just below the overbuying threshold, indicating strong but not overheating momentum. Bullian bias is supported by most oscillators, such as Momentum and MACD indicators.
Bitcoin price analysis. Credit: crypto.news
Moving from 10 to 200-day time frames to 200-day time frames reinforces the view that BTC remains in a solid bullish structure. At about $116,464, the 10-day index moving average supports the recent decline, and could serve as a short term if volatility returns.
A breakout above $120,000 could resume its path to retesting the $123,000 height if the Bulls retrieved volume support. On the downside, if $116,000 is not held, attention will be focused on the mid-bollinger range of about $112,000.
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