BTC’s On-Chain Metrics Support a Positive Short-Term Outlook

Santiment, the blockchain intelligence platform, revealed in an X post yesterday that the cryptocurrency market may not undergo a correction soon. This follows the recent market revival, which saw Bitcoin (BTC) and several other cryptocurrencies record dramatic increases in their respective values.

👍 If you’re concerned about a #crypto retrace, note that #Bitcoin still maintains a high pace of active addresses. Additionally, the top market cap asset is seeing a high level of dormant tokens now moving, typically synonymous with #bullish conditions. https://t.co/bvjDL2Shga pic.twitter.com/NvxKkQpkg8

— Santiment (@santimentfeed) October 26, 2023

According to the post, BTC still maintains a high number of active addresses. In addition to this, the leading cryptocurrency is also seeing a healthy level of dormant tokens now moving. Historically, this has been linked to bullish behavior in the market, noted Santiment.

Daily chart for BTC/USDT (Source: TradingView)

From a technical standpoint, BTC was at a decisive point as it rested on the $34K support level. After reaching a high of $35,280 over the past few days, the market leader’s price has been on a gradual decline throughout the past 48 hours. As a result, the cryptocurrency is currently at risk of potentially correcting to the $31,400 support level in the next few days.

This bullish thesis may be confirmed if BTC’s price breaks below the $34K mark in the coming 24-48 hours. If sellers continue to exert their pressure on the market leader’s price, then it could drop to as low as $28,760 in the short term.

Adding credence to this bearish thesis is the fact that a bearish ascending triangle had formed on BTC’s daily chart. This specific pattern may suggest that BTC’s price is due for a pullback.

Meanwhile, the RSI on the daily chart also supported this as it indicated that buyers were losing strength on BTC’s chart. Furthermore, the indicator signaled that BTC was in extreme overbought territory, which is usually seen as a good short opportunity by traders.

Nevertheless, BTC could still climb in the next few days since the bearish rising triangle that had formed is a medium-term pattern. Subsequently, the market leader may attempt a challenge at the $36,900 barrier within the coming week. This bullish thesis could be invalidated if BTC closes a daily candle below $34K in the next 48 hours.

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