Matrixport: Bitcoin Breaks Downward Trend, Rebound Appears

Matrixport explains through technical analysis that Bitcoin broke the downward trend on July 1st, but other analyses supported by on-chain data suggest that the Bitcoin price may still be overvalued.

Matrixport: Bitcoin Breaks the Downtrend

Matrixport stated:

Bitcoin has broken the downtrend. On June 25th, Matrixport's Greed Fear Index hit a "possible minimum level," which is usually associated with price rebounds; on June 26th, we pointed out that Bitcoin was oversold, and Bitcoin broke the short-term downtrend over the weekend.

Matrixport added that obstacles remain for Bitcoin to break out of sustained rebounds, but a rebound has appeared strategically.

Cryptocurrency Outperforms US Stock Market

Matrixport also mentioned earlier that despite the current market downturn, the performance of BTC at 46% and ETH at 48.3% since the beginning of the year far exceeds major U.S. stock market indexes such as the 20% for the Nasdaq and 15.1% for the S&P 500.

Bearish Signals for Bitcoin

Not all analyses are as bullish as Matrixport. Charles Edwards, founder of Capriole Investments, pointed out several indicators of price peaks in his latest analysis.

Increased Dormant Bitcoin Flow for Three Consecutive Months

The Dormancy Z-Score for Bitcoin measures the amount of Bitcoin spent on-chain, with a higher score indicating lower on-chain activity.

Charles Edwards observed that this indicator peaked in April and has now been on the rise for 3 months, with Bitcoin prices falling, while the Z-Score structure remains very similar to the highs of 2017 and 2021.

Currently, the Z-Score indicator shows sluggish on-chain activity, indicating that BTC prices may be overvalued.

Increase in Long-Term Bitcoin Sales

Charles Edwards also noted a sudden surge in selling activity from addresses holding Bitcoin for 7-10 years, with sales volume more than 10 times higher than previous highs.

This has recently been attributed to reasons such as the repayment of creditors by the bankrupt exchange Mt. Gox and government agency sales.

Reddit Forum: Mt. Gox Creditors Start Receiving Payments