Market analyst Jesus Rodriguez believes that investors should consider blockchain datasets when devising their Bitcoin investment plans.
Blockchain data helps with crypto investing
On August 12, Invector Labs chief scientist, Jesus Rodriguez, took to Hackernoon and made his case as to why he believes Bitcoin remains bullish despite correcting from $13,800. At the time of writing, Bitcoin continues to struggle to overcome $12,000 and technical analysis suggest the digital asset could drop to $10,800 – $10,600 over the short-term.
According to Rodriguez, the majority of speculation surrounding Bitcoin price has been focused on macroeconomic factors such as the US / China trade-war, global monetary easing and central bank policies that are leading to the devaluation of fiat currencies.
Last week, President Trump introduced additional tariffs on Chinese goods and the Dow Industrial Average reacted by dropping nearly 800 points. At the same time, volatility has increased across major world indices and China placed the cherry on top of this disastrous sundae by devaluing their currency.
Meanwhile, Gold and Bitcoin increased in value as investors viewed the assets as a store-of-value and hedge against volatility.
What does blockchain say about the Bitcoin rally?
While these are incredibly relevant factors that are clearly impacting Bitcoin price, Rodriguez suggests that investors take a deeper look beyond the macroeconomic perspective and analyze blockchain data.
Looking closer at blockchain data could uncover some interesting details and patterns that shed light on the recent Bitcoin rally.
According to IntoTheBlock’s blockchain-based data sets, nearly 90% of Bitcoin investors are “in the money”. There are also nearly one million addresses with positions acquired near Bitcoin’s current price and Rodriguez argues that these investors will help “influence the trading activity in the next few days.”
IntoTheBlock’s Break-Even analysis primarily focuses on realized gains and the indicator shows that Bitcoin’s next strong support/resistance is near $10,400.