Bitcoin On-Chain Data Highlights Key Similarities Between 2019 and 2023 BTC Price Rise

The recent rally in Bitcoin (BTC) prices from $16,500 to $25,000 can be attributed to a short compression in the futures market and recent macro improvements. However, as prices have risen, the data suggests that many interested buyers (including whales) have been left on the sidelines.

The recent rally to $25,000 shared many similarities to the bear market rally of 2019, which saw a 330% rise in the price of Bitcoin to highs of around $14,000 from the November 2019 low of 3 $250. Recently, the BTC/USD pair is up 60% from its November 2022 low.

On-chain and market indicators relating to the 2019 rally are sending mixed signals as to whether or not Bitcoin’s rally will continue. Nevertheless, there are good reasons to believe that the market has reached a crucial turning point where it can either turn into a full-fledged bull market or fall back into a long-term downtrend.

Let’s take a look at the top five indicators to understand the current price momentum against the 2019 uptrend.

Bitcoin Attacks Historic Trading Levels

Bitcoin price broke above the 200-day moving average (MA) at $19,600, which could encourage paper traders to open a long position. Historically, this metric has acted as a bullish-bearish pivot line, with breakouts above being bullish and vice versa.

BTC/USD typically retests the 200-day MA on a breakout, raising the possibility of a correction towards $19,500. However, this was not the case in 2019, when the price continued to rise without a pullback towards the 200-day MA.

Daily BTC/USD price chart with 200-day MA metric. Source: Trading View

At the same time, traders are likely paying attention to the 200-period weekly moving average at $25,100. Bitcoin price had never fallen below the weekly MA of 200 until November 2022 and the recovery of this level may encourage technical buyers to join the bandwagon.

However, until a breakout occurs, traders might continue to sit on the sidelines. Perpetual swap funding rates are currently neutral, suggesting traders are waiting for confirmation.

Crypto Twitter trader Immortal found that the market was only “halfway through” given the length of the current rally compared to that of 2019. The 2019 rally lasted 193 days from bottom to top , while only 92 days have passed since the bottom on November 9, 2023.

Comparison of weather between local low and high in 2019 and 2023. Source: Twitter

Immortal goes on to say that if the 2019 timeline fractal holds true in 2023, BTC/USD could hit $46,000 by March.

A stablecoin supply ratio oscillator is near the 2019 high

Bitcoin’s stablecoin supply ratio (SSR) oscillator measures the purchasing power of the market. The indicator measures the ratio of Bitcoin market cap to stablecoin supply. Weak readings on the SSR oscillator indicate higher stablecoin buying power. Conversely, a spike in the metric indicates overbought conditions.

The Bitcoin price surge in February 2023 saw the SSR oscillator reach levels not seen since 2019 and 2021. The indicator suggests that the positive trend may soon end. There is a small chance of a final push towards the psychological level of $30,000.

However, the data could be taken with a grain of salt due to the regulatory crackdown on the BUSD stablecoin, which caused its supply to drop significantly. This could have distorted the SSR oscillator to show overbought conditions.

Bitcoin’s stablecoin supply ratio (SSR) oscillator. Source: glassnode

One of the biggest concerns with the current surge is the lack of purchase of whales. Unlike 2019, when the number and holdings of BTC addresses with over 1,000 BTC increased as the price jumped from the bottom and whales sold off in the current rally. The divergence between the number of whales and the price raises concerns about the sustainability of the positive trend.

Number of BTC addresses with a balance greater than or equal to 1,000. Source: glassnode

Data Highlights a Crucial Bullish-Bear Pivot Point

Investors add to their winning positions on pullbacks in an uptrend and this is indicated when the Spent Output Profit Ratio (SOPR) indicator remains above one. The opposite occurs in a downtrend where bears dominate the market by selling during rallies. A metric crossing above 1 is a potential trend reversal signal.

Glassnode’s 7-day moving average of the adjusted SOPR indicator shows that the downtrend has likely reversed. The indicator turned bullish when BTC broke above $20,800 in January 2023. The metric retested the pivotal support level with Bitcoin’s price at $21,800, making it a crucial support level for a sustained uptrend .

Related: Bitcoin faces a weekly and monthly close with a macro uptrend in play

7-day MA of Bitcoin’s adjusted SOPR indicator. Source: glassnode

Likewise, the price broke above the average buy levels of both short-term and long-term holders, which is another signal of a potential trend reversal. This could be a sign that the market has reached a crucial turning point as the chain oscillators return to equilibrium.

The metrics also suggest that a potential uptrend looks likely as price holds above support at $21,800, $20,800 and $19,600.

A weekly close above $25,100 could encourage derivatives and technical traders to participate in the current rally, but there are some early warning signs that the market may be reaching overheated conditions and a quick correction to lower support levels is not possible. can be excluded.

The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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