Bitcoin price fell after sharp rise that raised the asset’s price to $ 12,000
After rising to $ 12,000 on August 1, Bitcoin recorded its most significant daily retreat since the 8.24% drop on June 10, with BTC depreciating 10.57% yesterday.
Although this move has seen the Bitcoin rally stall in its tracks, in the past few hours, the crypto asset seemed to maintain a price position between $ 11,000 and $ 11,200. At the time of this writing, the crypto community was quite divided over what that meant.
Although most people have a very optimistic sentiment in the market, it is still possible to argue about a prolonged bearish setback.
According data provided by Santiment, when Bitcoin was on its way to $ 12,000, the daily active addresses did not correspond with an increase of its own. As noted in the attached chart, daily active addresses peaked just before Bitcoin rose to its $ 12,000 price. In fact, in retrospect, the signs pointing to a correction were evident, since daily addresses were falling on the market, just before BTC plunged. Santiment added:
“Yesterday the price continued to rise to $ 12,000, despite the DAA dropping from 1.06 million on Friday, to 959 thousand on Saturday (down ~ 9.5%). As a result of this bearish divergence, #Bitcoin fell to ~ $ 11,000 in a hurry (a ~ 8.3% drop in price). ”
Bitcoin has been 98.54% profitable since the beginning; what is the alternative view?
Danny Scott, CEO of the UK Exchange Coin Corner, recently tweeted that Bitcoin has been profitable for over 98% of its total existing days. Now, for an investor who is one of the first participants in the market, the feeling is positive.
However, he was also quick to add that Bitcoin is above $ 11,700 for just 62 days.
The above scenario can be seen in two ways. For starters, the rally from now on will depend a little on new buyers. Unfortunately, historically, Bitcoin has not had many buyers above the current price of $ 11,179.
So if we took Danny Scott’s word and accepted that the bull run has not yet arrived, the main question to be asked is whether new buyers would be optimistic enough to enter the crypto space at such a high price, instead of waiting for it for another low.
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Bitcoin Bull-Trap was executed on August 2?
Source: BTC / USD at TradingView
Similar to daily active addresses, another important metric in the chain that fell just before the rally was Bitcoin trading volume. As noted in the chart, between July 27 and August 1, Bitcoin’s price and trading volume followed a bearish divergence that may have led to a bull-trap at the top. Therefore, for Bitcoin, it is highly possible that the $ 12,000 sale was caused by this bull-trap.
With the price consolidating at the moment, the market is still quite optimistic. However, considering the fact that the market craves zones above $ 12,000 again, it is important to note that BTC is entering unregulated commercial territory once again.