Popular on-chain analyst Will Clemente sets new support levels for Bitcoin (BTC) after the crypto market’s latest price drop from Covid.
Bitcoin bulls need to defend $53,000
Clemente tells his 430,000 Twitter followers that the support level to consider is $53,000 and since it hasn’t seen any major volatility yet, Bitcoin price could test this support:
Covid variant news is not ideal. Still, to see a large liquidation or open interest, we may see a bearish wick. However, the STH (short-term holder) cost basis, or what I call the ‘on-chain bull market support band’, is $53,000.
According to the analyst, the bulls’ defense may be successful
In Blockware’s Sunday newsletter, Clemente says that the output earnings ratio (SOPR) data shows that Bitcoin investors are not yet ready to sell their BTC at a loss, so $53,000 could be held. SOPR is an on-chain metric that shows whether BTC holders are selling at profit or loss.
Clemente also envisions a pattern where strong Bitcoin holders absorb selling pressure from short-term holders:
There is currently a clear bullish divergence between the illiquid supply shock rate and the price. The illiquid supply shock compares liquid assets (which sell 50% of the BTC they receive) and highly liquid assets (which sell 75% of the coins they buy) to illiquid assets (which hold 75% of the coins they buy). This means that the supply has moved to organizations with little sales history. If this starts bearish I will be in a bearish trend but for now it remains a stable slope.
Cryptocoin. com, concludes that BTC is still in an uptrend despite the recent correction, but says he is ready to change his stance when he sees that key metrics in on-chain data are giving clear bearish signals:
All in all, if we are in a truly bull market, the asymmetry is very upside down right now. Invalidity would begin to close below $53,000 for a few days, seeing SOPR break below and fail to retrace 1 from the lower side, plus the illiquid supply shock tumbles.