Bitcoinâs lackluster price action over the past few weeks has struck a serious blow to investor sentiment, leading many to anticipate weakness in the days and weeks ahead.
That being said, this growing bearishness may be unwarranted, as some interesting trends seen while looking towards its on-chain fundamentals seem to suggest that further upside is imminent in the days and weeks ahead.
There is one fundamental indicate called Bitcoinâs âPuell Multipleâ that has historically flashed before the starts of previous parabolic uptrends â including that seen in late-2017.
This indicator is now flashing again, signaling that the cryptocurrency could be in the cusp of seeing massive upside in the near-future.
BTCâs next trend may also be strong and more sustainable than those seen in the past, as history suggests that long-held bouts of sideways trading are nearly always followed by decisive trends in one direction or another.
Bitcoinâs Consolidation Pattern Likely to Hold Massive Influence Over Next TrendÂ
Bitcoin is currently trading down nominally at its current price of $9,400. This is the price level at which it has been trading at throughout the past several weeks, struggling to break below $9,000 and above $10,000.
These two levels mark the lower and upper boundaries of its trading range, although it also has some downside support at $8,500 and upside resistance at $10,500.
It is important to keep in mind that periods of intense consolidation tend to lend themselves to BTC making a massive movement once they resolve.
As such, it is highly likely that one of these support or resistance regions will soon be visited by the benchmark cryptocurrency.
Consolidation phases like the one Bitcoin is currently caught within also tend to spark sustainable trends rather than just fleeting movements.
Cantering Clark â a prominent and respected analyst â spoke about the historical precedence behind this trend in a recent post on Twitter.
âOne thing that you can count on if you are not sure of the direction for Bitcoin: After a period of compression i.e. realized volatility & ATM IV being relatively flatlined and stop fuel building at highs and lows, the move will have follow through.â
Image Courtesy of Cantering Clark. Chart via TradingView
He further added that he expects the next trend to last for a minimum of two weeks.
This Ultra-Bullish Technical Indicator Predicted the 2017 Rally, and It Just Flashed AgainÂ
Bitcoinâs Puell Multiple â a technical indicator offered by analytics platform Glassnode â just moved into the âbuyâ zone for the first time in weeks.
âThe Bitcoin Puell Multiple has dropped back into the green âbuyâ zone after almost three weeks. For investors with long-term time horizons these levels below the 0.5 line have historically marked excellent entry points into BTC,â they explained.
Image Courtesy of Glassnode.
While looking at the above chart, it does appear that BTC could be laying the groundwork for a parabolic uptrend in the weeks and months ahead.
Featured image from Shutterstock. Charts from TradingView.
