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 celebrating a classic return to form for BTC price action.
Bitcoin refuses to flip bearish
After seeing three straight 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 driving seat as July drew to a close as resistance levels fell and sentiment improved.
“Bullish engulfing on the monthly chart for Bitcoin,” Milne summarized.
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 — have been so surprising that even seasoned hodlers appear confused about what to do next.
On-chain data shows that some long-term holders (LTHs) 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 towards the neutral 1 value, host Glassnode explains, 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.
“This is one of the reasons we’re still at 41k. Disbelief.”
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.”
— PlanB (@100trillionUSD) August 1, 2021
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.