- Bitcoin plunged as low as $11,100 earlier this week.
- The drop led many analysts to think that the cryptocurrency was poised to lose the gains it incurred in late July and early August.
- One trader said that assuming Bitcoin’s weakness earlier this week, a move to the $9,000s was entirely possible.
- On-chain data, though, shows that BTC has likely found a bottom in the near term and will trend higher in the days ahead.
- This is in line with Bitcoin’s ongoing price rally.
Bitcoin Has Found a Local Bottom, And Upside Is on Its Way
On-chain statistics are purportedly showing that Bitcoin is on the verge of its next leg higher.
A cryptocurrency technician shared the chart below on August 13th. It shows Bitcoin’s macro price action coupled with the metrics “moving profits” and “moving losses.” These are two on-chain metrics that show if transactors of Bitcoin on a certain day/period are in profit, are netural, or at a loss. As the site that pioneered this indicator reads:
“Moving profits and losses (MPL) show the profits and losses of bitcoins being transacted on a given day, i.e. it shows if people are cashing out profits or panic selling to take a loss. Only bitcoins older than 1hour are considered and a 14-day moving average is also applied to smooth out the signal.”
According to the technician, the fact that the “moving losses” line (in red) is spiking is a sign that Bitcoin has found a local bottom and may move higher:
“Moving losses went up a lot recently. That’s good. ML skyrocketing usually indicates a bottom.”
Chart of BTC's recent price action with the "moving losses" and "moving profits" indicator shared by trader Byzantine General (@Byzgeneral on Twitter). Chart from WhaleMap.io.
This same trader has said that he thinks Bitcoin is going to $13,000 in the near term. As reported by Bitcoinist previously, he said on the matter:
“Lots of liquidity still above us. And the monthly support is still support. Short term I think 11900 is possible. But as you know, mid term I’m still aiming at 13k. Let’s see how much we can get.”
Following Ethereum Higher
Bitcoin’s chances at upside have been bolstered due to a rally in the value of Ethereum. ETH is up 10% in the past 24 hours, outperforming BTC by around 8%. As Ethereum has led the crypto market in many segments of this year thus far, Bitcoin is likely to rally even higher in the days ahead.
ETH, though, may manage to outperform Bitcoin as it has since March.
Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com On-Chain Data Shows Why Bitcoin's Next Leg Higher Is Just Starting