Bitcoin (BTC) closed July above $41,000 in a “bullish engulfing” candle that dramatically upends its previous downtrend.
In a tweet on Aug. 1, investor and entrepreneur Alistair Milne joined many in celebrating a classic return to form for BTC price action.
Bitcoin refuses to flip bearish
After seeing three monthly red candles in a row, BTC/USD held onto late gains to post a monthly close that few had anticipated.
Despite the dip to $29,000, bears failed to stay in the driver’s seat as July drew to a close as resistance levels fell and sentiment improved.
A bullish engulfing pattern is a chart pattern that forms when a small red candle is followed by a large green candle — i.e., July, the body of which completely covers or engulfs the body of the previous candle (June).
The move up — and its staying power — has been so surprising that even seasoned hodlers appear confused about what to do next.
On-chain data shows that some long-term holders (LTH) are in fact selling as BTC/USD rises, something that analyst Lex Moskovski believes corresponds to the “disbelief” stage of a classic market cycle.
Moskovski highlighted the long-term holder spent output profit ratio indicator (LTH-SOPR), which this weekend hit its lowest levels in 2021.
SOPR looks at the value of coins moved in a particular time period to get an impression of profitability of coins being sold. A downtrend toward the neutral 1 value, Glassnode explained, suggests that profitability among the coins in question is low.
“Some long-term bitcoin holders are selling into this bounce with minimal profit as indicated by LTH-SOPR hitting this year’s low for two days straight,” Moskovski commented.
Bulls, meanwhile, continue to look for triggers that could send BTC/USD past $42,000 resistance for good, this having seen two tests in the past 24 hours.
Beyond there, as Cointelegraph noted, little lies in the way until $45,000 and $47,000.
Equally enthusiastic for upside on Saturday was PlanB, the creator of the stock-to-flow price model family, who described Bitcoin’s July close as being a recovery “like clockwork.”
Stock-to-flow, while currently demanding a Bitcoin price of nearly $100,000, remains valid, with PlanB giving a minimum August close requirement of $47,000.