Round, exact numbers typically become a strong psychological barrier for investors in capital markets. That certainly seems to be the case with the $10,000.00 mark in the case of Bitcoin. For days, analysts have been projecting different paths to break through the mystical resistance level. Complementing technical charts, investors could also get interesting insights about Bitcoin’s path to $10,000.00 by analyzing the Bitcoin blockchain.
Blockchains represent an incredibly rich and unique source of information about crypto-assets. One of the most fascinating benefits of blockchain datasets is that they contain statistically relevant patterns about the behavior of individual investors which can result highly complementary to traditional technical analysis models.
Let’s explore these ideas in the current market context of Bitcoin.
What technical analysis tells us
Technical charts showed that there is a large resistance at $9850, followed by some resistance at $10,000 and more around $10,500. In terms of support, there is support at the lower end of the wedge and channel formations around $9,530 and $9,250, respectively.
A blockchain perspective
There are many statistical and machine learning methods that can be used to extract insights from individual addresses in a given blockchain. IntoTheBlock’s In-Out Money Around the Current Price(IOMAP) uses machine learning to identify the ten most relevant clusters of investor positions at a range of plus-minus 15 percent of the current price. The analysis offers a very granular view of investor positions that are susceptible to near-term price movements. Given that we are looking at individual investor positions, the IOMAP analysis can be used to complement traditional support/resistance models by quantifying the positions of individual investors. Read More...