Bitcoin mulling the return into the channel?

Since the start of this month, Bitcoin has been trading above the upper bound of the upward-sloping channel, which begs the question of Bitcoin’s return to it. With that said, there are a few developments that we are paying close attention to. First, the number of Bitcoin addresses with balances exceeding 100 BTC is down from where it was at the start of the month, particularly on 5th December 2023, when it stood at 16,006, and Bitcoin broke above $44,000; since then, the number has been pretty much trending down (with upticks on the pullbacks in Bitcoin’s price). As for the number of addresses with balances exceeding 1,000 BTC, this remained relatively steady throughout the month. In addition to that, on the daily chart, technicals like RSI, MACD, and Stochastic reversed to the downside in the past few days. Furthermore, ADX continued to decline, suggesting the bullish momentum is decreasing. Meanwhile, on the weekly chart, RSI reached a strongly overbought level, ringing a small alarm bell to us; though, we want to note that the weekly chart remains bullish (at least for now). Consequently, we prefer to wait on the sidelines slightly longer. However, there might be one interesting short setup if Bitcoin drops below the channel's upper bound (with stop-loss above it).

Illustration 1.01

Illustration 1.01 portrays the daily chart of BTCUSD and simple support/resistance levels derived from past peaks and troughs.

Technical analysis gauge
Daily time frame = Bullish (with the trend losing momentum)
Weekly time frame = Bullish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.

Comment:

There is one interesting thing we would like to point out. From 13th October 2023 to 14th October 2023, the number of Bitcoin addresses with balances exceeding 100 BTC rose by 108 overnight (from 15,867 to 15,975); remember, that was just one day before the fake news about Bitcoin Spot ETF came out. Subsequently, with Bitcoin’s price rising, the number reached a high of 16,029 on 8th November 2023. But since then, it has been declining. The latest data shows this number standing at 15,940.