The price of Bitcoin (BTC) fell below $10,000 for three consecutive days. Despite the weakness in BTC’s short term trend, one analyst says that the optimism in the medium term is intact.
Bitcoin price reaches USD 9,800 while the search for filling the futures gap reaches its lowest point in 6 weeks
The weekly chart of Bitcoin
In five days, the price of Bitcoin slid from $11,462 to $10,000, registering a 12.6% drop. Gold has also had trouble recovering from the weakening momentum, which coincides with the recovery of the US dollar.
How is it that a bullish outlook for Bitcoin remains intact?
According to Willy Woo, an on-chain market analyst, local chain indicators are turning upward.
These indicators include activities such as HODLing, active addresses, network activity, and proportion of NVT. The Bitcoin NVT signal, for example, attempts to detect market spikes by evaluating the price against the daily trading value.
The on-chain data points probably point to a medium-term upward trend due to Bitcoin’s sharp drop from $12,000. Although the BTC price has plummeted by almost 20% from its yearly high, network activity remains relatively stable. Woo said on September 6:
„The change in the local chain is becoming bullish (looking at the next few weeks), not realizing this has bottomed out, although it may have. Playing the big changes is not a bad time to buy back“.
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Bitcoin network activity is relatively stable
The level that many traders are looking at is the CME gap of $9,650. A gap between the CME Bitcoin futures market and other exchanges forms when CME closes over the weekend. The $9,650 gap has been present since July.
Regarding questions about the gap and the likelihood of Bitcoin Loophole falling into it, Woo said he could get through it. He commented on this:
„I also wonder if the gap is at the front, to fill in gaps with solid liquidity. The whales in the derivatives exchanges have enough dominance to make that happen.
A short-term concern is that the NVT ratio still stands at 81.5. When the NVT ratio remained above 70, in previous market cycles, it marked a local ceiling.
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Many on-chain indicators show an optimistic medium-term trend, but some suggest a shaky short-term momentum.