An overview of Bitcoin with technical data and price action

Overview of Bitcoin

Looking over the price we can see several indications of major price points or what we call important prices so lets jump into a little data and digest a few things. We will look at a few factors such as:

• Technical Data
• Fundamental News
• Price Action

Ahh... Bitcoin, the digital currency crypto twitter allegedly knows everything about. Strangely enough every single day there is over $10 Million liquidated every 2 hours.

Is it possible that social media influencers may not know what price is doing? It's a possibility, we won't rule it out entirely.

But not to worry, what we can do is educate ourselves with data which will give us more confluences for...

Well a more accurate speculative guess! 👏 Hooray!

This leads us to a very important question, why is technical data good for trading, speculation and understanding of price?

Firstly the above image shows us a visual representation of what happened to the price. It sort of went on a little ride to the downside, well it wasn't little it was a 65.64% drop from it's $10,540 price point 🤯

Over $70 Billion in Bitcoin value vanished in one day resulting in many funds shutting down or filing for bankruptcy, legal action was taken against exchanges.

How does this answer our question? Well the technical data provided by CryptoQuant showed a massive inflow to exchanges starting from the 7th of March 2020 to the 13th of March 2020. This was a 13x increase across ALL-EXCHANGES.

So does this answer the above question on why technical data is important, more specifically on-chain data?

Being able to understand and read this before it happened could of meant a few things, traders could of taken a hold of the opportunity to open a position for the downside (short) and portfolio managers, could of adjusted portfolios for a significantly cheaper price to buy-back Bitcoin.

See why on-chain data is extremely helpful?

Now lets dive into some technical data together now that you know the 'why' we use it.

On-Exchange Data

We'll start off with on-exchange data which can give us a raw measurement of the potential Bitcoin that are held on exchange and ready to be sold within the liquid market. This indicates some degree of accumulated selling pressure across all exchanges.

• High = High Selling Pressure (HSP)
  Having a larger number of Bitcoin on exchanges to be traded could indicate a high selling pressure within the market.
• Low = Low Selling Pressure (LSP)
  Having a lower number of Bitcoin on exchanges to be traded could indicate a low selling pressure within the market.

This shows the change in status (scarcity) of number of Bitcoin across all exchanges.

• Increasing Trend = Decreasing Scarcity (Bearish)
  Having more Bitcoin available on the exchanges indicates a decreasing scarcity being traded which supports a bearish (downward) movement.
• Decreasing Trend = Increasing Scarcity (Bullish)
  Having fewer Bitcoin available on the exchanges indicates a increasing scarcity being traded which supports a bullish (upwards) movement.

Exchange Reserves (All): 2.272 Million Bitcoin

Miners Data

A miner has significant impact and control over supply on Bitcoin's blockchain. Miners are simply rewarded for their work of processing transactions (blocks). If mining pools shut down their mining activities for whatever reason then the network wouldn't work. The reward to Miners is Bitcoin for processing these transactions which are newly generated.

This is type of consensus in blockchain is referred to as Proof of Work, which you might've heard from time to time. Does it sound familiar?

If you didn't go to your day job, would your boss pay you? We don't think so... (Unless you got holiday pay)

So lets look at the miners data.

What is important for price impact?

• Miner Outflow
  Which is the outflow of Bitcoin from mining pools to wallets.
  High = Miners' coins are exposed to selling (Bearish)
  Low = Only a few miners' coins are exposed to selling (Bullish)
  Note: Miner to Exchange also falls under this "Total Outflow" category.
  ‍
• Miner to Exchange
  Is the total amount of coins transferred from mining pools to exchange wallets
  
  
• Miner Position Index
  The ratio of number of all miners' outflow in USD value, divided by 365 days moving average
  High = Miners are sending their Bitcoin out of their wallets more than usual (Bearish)
  Low = Miners are sending their Bitcoin out of their wallets less than usual (Bullsih)
  Increasing = Miners are involved in selling their Bitcoin and increasing their selling amounts
  Decreasing = Miners are being less involved in selling and decreasing their sold amounts

Now that you're caught up to speed on what impact Miners have on the price, lets dive into what currently is happening.

Miner Outflow

Last Value Miner Outflow: 889.1007 BTC
(incomplete data)

Miner to Exchange

‍

Last Value Miner to Exchange Total: 62.17
(incomplete data)

Miners Position Index (MPI)

Is merely the ratio of the number of all miners outflow in USD value divided by 365 days (1 year) moving average, which will give us the MPI.

Summary of Technical Data:

• On Exchange reserves are dropping, giving us indications that there is less selling pressure of Bitcoin
• Miners Outflow is dropping indicating less selling pressure of Bitcoin across exchanges
• Miner Flow to Exchange is dropping indicating less exchange wallets holding Bitcoin
• Miner Position Index shows miners have less selling pressure and are not increasing value of sales of Bitcoin

What does this mean for speculators?

1. A rise in Bitcoin value
2. A rise in accumulation of Bitcoin

But this doesn't confirm price movement, we still need to look at the chart. So lets do that now.

Price Action Analysis

Lets look at the weekly time frame, when you see the below chart each candle represents one week of time.

Red = Price movement is down
Green = Price movement is up

Candlesticks have what we call wicks, which give us a visual representation of where price has been.

So if you see a candle and it has a long wick on top, you know that it rose up, then fell and closed lower for the week on each.

Now we know where the price is and can clearly see it's all-time high.

Lets look for candles that have long wicks on the bottom around the same price points and call them important prices we will mark them with horizontal lines.

Awesome. Look at us go we're pretty much experts at this point. Well not quite but we're doing much better than most!

We cam see 3 new lines added on the chart, 2 black and 1 light grey in colour.

What do they tell us?
Light Grey Line Price $17,622.00 = most nearest price point we will hit again.
Top Black Line Price $31,778.57 = Top of where price might fluctuate and pull back from
Bottom Black Line Price $12,468.00 = Bottom of where price might fluctuate and push back from

These lines now paint a picture on the chart for us to easily understand where price can go and where it has been before.

Now we're forgetting about one more important factor here, since we're speculating price on a long-term basis.

Lets include one of the long term events that happens in Bitcoin which we all know as halving.

What is Bitcoin halving?

One of the most pivotal events on Bitcoin's blockchain is the halving, when the supply of new bitcoins is cut in half. Each halving reduces the rate of inflation, thereby creating upwards pressure on the Bitcoin price.

This year miners are only being rewarded 6.2 Bitcoin for completing (mining) each block successfully.

The next halving will happen on a projected date of March 26 2024.

So lets add that timeline to our chart.

Now we can see from today, it's 74 candles or 519days away, until the halving marked with the dotted red vertical line.

The green area is where are predicting price to head to which is about $108,000 per Bitcoin.

Speculative Summary

Having the technical data, indicating we could see a rise in the coming weeks, as well as additional confluences pointing towards exchange reserves dropping and accumulation of Bitcoin happening it's safe to say we could see a bullish or upwards price movement in the coming days.

Taking into the fact traders psychology of price, which can still move it any direction, as well as large Bitcoin holders means we can still visit the prices marked on our chart.

However with that being said, we have a clear indication of where price can bounce between before the next halving in 2024.

We hope this has given you some indication, new information to read about and perhaps sparked that curiosity even further into Bitcoin.

Also please read the disclaimer below, we'll include this just in case..

Disclaimer: This should not be construed as investment advice, the data involved in this article should be considered education material.
The team and Zuus are not liable for any decisions you make based on the data and subject within this article.

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Until next time,