Bitcoin (BTC) is rising steadily once again after plunging over the weekend. This move has sparked optimism across the market as investors eye a full recovery for BTC and the general crypto market.
While still marking less than 1% surge on the day, Bitcoin seems set to rise higher. A recent analysis by CryptoQuant gives a glimpse of what is happening in the market. But will BTC recover $120,000 soon?
Bitcoin Reclaims $114K with Demand Still Positive
Today, Bitcoin has experienced a slight recovery after falling to $112,000 on Saturday August 2. According to data by TradingView, the price of BTC now sits at $114,492. While this level only marks less than 1% surge on the day, it highlights a slight recovery following the latest slip up.
However, BTC’s volume data shows there is still hesitancy amongst some investors. Despite bouncing above $114K, the trading volume lags compared to that of the late July-selloffs. At the moment, the volume is at $48.174B noticeably suggesting caution amongst market participants.
But in a bid to measure the demand for BTC, CryptoQuant data still shows that Bitcoin’s demand is still high. In his analysis, CryptoQuant analyst Darkfrost observed what the Apparent demand indicator shows.
This metric usually compares new BTC issuance to over 1-year inactive supply, highlighting what we call apparent demand. When the ratio drops below zero, it means demand has turned negative; conversely, when it rises above zero, it signals positive demand.
For the case of Bitcoin, Darkfrost observed that the demand for BTC is still positive. In fact, Investors have accumulated a total of 160,000 BTC over the last one month.
“Currently, demand remains clearly positive, with around 160 000 BTC accumulated over the past 30 days,” Darkfrost concluded.
Long-Term Holders Still “Buying Like Crazy”
Additional data also shows that addresses that only buy and never sell, or rather Long-Term Holders (LTH) are still accumulating. Measured by the Demand from Accumulator Addresses indicator, the demand from these wallets is still rising.
Data by CryptoQuant shows that these addresses have accumulated roughly 50 000 BTC over the past month. This shows strong and sustained buying behavior by these LTHs. In a comment regarding this accumulation, Quinten Francois, the co-founder of weRate, termed the accumulation as ‘buying like crazy.’
“Retail is panic selling this correction. But addresses that only buy and never sell are buying it like crazy,” Quinten remarked.
Clearly, the demand-side indicators point to a positive outlook despite the recent price volatility. This could potentially result in an upward price push with firms like Metaplanet still stacking Bitcoin.
What’s Next for Bitcoin, $120K or Reversal?
Based on the demand indicators, smart money is still accumulating Bitcoin like crazy, fueling optimism amongst investors. Some investors are even eyeing a Bitcoin rally to $120K or even higher. For instance, crypto trader ‘Banks to Bitcoin’ eyes a BTC rally to between $120K and $125K, based on the falling-wedge pattern formation.
“BTC Buy setup. Currently trading at the falling wedge bottom, expecting a pump towards 120k-125k,” Banks to Bitcoin predicted.
But such a rally would not be without resistance. According to the daily chart on TradingView, the immediate resistance lies around $115,019. Climbing past this level could open the door to a higher level with the next resistance at $117,247 before a rally to $120K. To reach the $120,000 BTC must surge over 4.5% from the current level.
In case the latest recovery fails to hold, Bitcoin could slide further. The coin has established support around $112,014 following the recent plunge. However, if this level is breached, BTC could dip further below $110K towards a stronger support around $108,205. In such a case, this would invalidate the recent bullish setup.
With demand still high and optimism coming back, BTC could reclaim $120K. However, a surge in volume and favorable macroeconomic environment must prevail for a full price recovery.
