Bitcoin is in a bullish formation following last week’s gains after the spring, as seen on July 15 when prices broke above the 20-day moving average.
However, despite the optimism, cracks are starting to form. Yesterday, July 23, prices pulled back from above $67,500 to below $66,000, the key support.
If sellers double down by today’s close, reversing current gains, it will quickly slow the uptrend’s momentum, challenging last week’s bulls.
Bitcoin Trading Activity Increases: Are Bulls in the Equation?
While Bitcoin remains generally resilient and inches away from all-time highs, analysts are keeping a close eye on events while maintaining a bullish bias. Speaking to X, an analyst said Trading activity has been on an upward trajectory.
In recent days, the analyst said that the average trade volume (AEVF), used to gauge BTC trading volume on exchanges like Coinbase and Binanceis up 9%.
The analyst added that the growth in exchange activity suggests that the BTC market could be positioning itself for a major market rally. However, it needs to surpass the average annual volume threshold for that to happen.
This means that the AEVF indicator is expected to increase by another 11%, which would take it to over 45%. During the last bull cycle, when bitcoin surged to $73,800, the AEVF indicator reached as high as 45%.
Although the uptrend appears to be struggling, other market data shows that whales, especially those holding at least 10,000 BTC, have aggressively accumulated over the past week.
Their buying decision coincides with the expansion until July 15, when prices broke key resistance levels, significantly at $62,500, to reach $68,000 over the weekend.
New BTC whales have key support at $64,000
For now, the average purchase price of new whales, according to the analyst noteis around $64,000. So, if prices move above this line, sentiment remains bullish and large holders will not be able to reconsider their decision.
As prices fluctuate based on cues that buyers are in play, accumulating on dips, it is also imperative for traders to monitor their reaction to critical resistance levels.
Looking at the daily chart, Bitcoin needs to reject prices below $66,000 and find the momentum to break above $70,000 and $72,000. These two levels are crucial reaction points that have formed local sell-off or loading zones in the past.
Main image from Canva, chart from TradingView
