QR Capital’s on-chain analysis may indicate the bull market’s return

Investors who were wary of the recent Bitcoin (BTC) price rally and feared that the rally could be just a momentary gasp may start to heat things up because the Bull Market may be back.

According to a recent study shared with Cointelegraph by QR Capital, through BlockTrends, the blockchain industry trending and insights company, a lot of data on-chain signals for a new bullish cycle for the main cryptocurrency in the market, Bitcoin.

The BlockTrends Report deals with the bitcoin futures market, whose latest movements may point to the return of the bull market, other points addressed were the oscillations of the hashrate and the difficulty adjustments for miners after the ban on the activity in China.

What drew the most attention in the study was the possibility of the return of the bitcoin bull market, since, in recent weeks, the biggest short squeeze of the year took place. That is, with an increase in the price, there were several liquidations and whoever was trading short was forced to buy the asset before it became too expensive.

This movement caught the attention of experts, who are now speculating on the bull market’s return. Since the release of the report, on Aug. 2, Bitcoin has risen 19.69%.

The analysis also addresses the difficulty adjustment per block mined in the bitcoin network, por account of the drop in hashrate caused by China’s mining bans.

Bull Market

“After spending almost 10 weeks in territory of strong correction and subsequent price lateralization, Bitcoin has again registered a considerable increase in volatility,” the report highlights.

According to QR, the increase in volatility also increased investor appetite to return to the futures market. With the equivalent of R$130.7 billion in open contracts, the volume in the options market rose 31.8% from the local low on June 26, a few days after the biggest capitulation event in the history of the cryptoactive.

As a result, the five most congested calls are now $42 thousand (R$215.18 thousand), $44 thousand (R$226 thousand), $40 thousand (R$205.6 thousand), $50 thousand (R$257 thousand) and $45 thousand (R$231.3 thousand), with a volume traded above 8.7 thousand Bitcoins.

The most traded puts are now $38 thousand (R$195.3 thousand), $35 thousand (R$179.9 thousand), $36 thousand (R$185 thousand), $34 thousand (R$174.7 thousand) and $30 thousand (R$154.2 thousand), with a total volume of 3.3 thousand Bitcoins, a volume 62% lower than the five largest longs.

Another point raising by the QR is that the amount of entities buying Bitcoin is slowly returning to levels seen at the beginning of the year, while the amount of entities selling Bitcoin remains lateral.

“Another relevant on-chain metric is Total Offer in Profit, ie the total amount of Bitcoins that were traded at a price below the current one. According to Glassnode, approximately 11.2% of all Bitcoins returned to showing profit for its investors. With the movement, the network went from 66% of Bitcoins in profit to 77%, over the last week”, he highlights.

Other indicators

In addition to the indicators pointed out by the QR, other data also show a positive scenario for the cryptocurrency market. Recently, on-chain analyst Glassnode highlighted that currencies held for 12 months or more are not moving despite the strong rally, indicating “holding behavior”.

Meanwhile, as Brazilian analyst Marcel Pechman points out, the Crypto Fear and Greed Index, a well-known indicator that tracks volatility, volume, social media, domain and Google searches, has changed from “moderate” to “greed”.

Pechman points out that the 74-point indicator hit Aug. 8 was the highest level since April 18, indicating that investors firmly believe the cycle bottom has lagged behind. The index ranges from 0 (extreme fear) to 100 for maximum greed.

“Both the Bitfinex margin and the futures currency derivatives markets point to a lack of confidence from bears as Bitcoin breaks the $45,000 resistance. This suggests that the recent 20% rise is well-founded and not just a speck or result of heavy sales,” he highlighted.

Regarding Bitcoin price behavior analyst Rakesh Upadhyay points out that the Bitcoin (BTC) rally of $29,482.61 on July 21 continued to overcome resistance after resistance.

“A positive sign about the rally was that Bitcoin was unaffected by the gold flash crash, which momentarily dropped to a four-month low. This suggests traders are focusing on sector fundamentals and not affected by the performance of others asset classes,” he said.

In this way he points out that the BTC/USDT could then rise to the resistance zone at $50,000 to $51,500 but he points out that if the price drops below $42,451.67, the pair could then fall to the next support at $36,670.

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