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Bitcoin Reaches $40K After 6-Week Absence, But On-Chain Activity Is ‘Somewhat Bearish’

Bitcoin (BTC) touched $40,370 on July 26 as a solid day of gains saw a return to a key price milestone.

BTC/USD 1 minute candle chart (Bitstamp). Source: TradingView

BTC Price Daily Gains Close to 20%

Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD was touching $40,400 before consolidating later on Monday.

The pair retained its previous gains from the night before the day before, rounding $38,000, before making another bounce after the opening of Wall St.

Amid some understandable excitement from investors waiting for the eventual resumption, Cointelegraph contributor Michael van de Pope cautioned against excessive bullishness at current levels.

“Bitcoin is still showing strength, although sentiment is getting bullish again as the border resistance approaches,” he said. wrote Just before the $40,000 hit.

“The trend has changed as the market made a higher high. I think we are still seeing HL at $34.5-36K until a breakout of $41K in the coming weeks.”

This would mark an exit from a long-established trading range that has been in place for more than two months.

BTC/USD Buy and Sell Positions (Binance). Source: Content Indicator/Twitter

A look at the support and resistance levels on major exchange Binance at the time of writing shows relatively little buyer activity above $36,000, with $41,000 still left for sellers.

The Content Indicator, which provides Binance data, said that it was important to consider moving averages when trying to understand current movements.

“Quiet” on-chain activity may reduce bulls

While Monday’s gains were impressive, Van de Poppe was not the only one to call for a pragmatic assessment of the bitcoin market at large.

RELATED: BTC Price Burns on its Way to $40K: 5 Things to Watch for in Bitcoin This Week

In the latest edition of its weekly newsletter, “The Week On-Chain,” data analytics firm Glassnode similarly highlighted the need for on-chain activity to capture price performance to keep the market afloat.

“Overall, on-chain activity remains somewhat bearish and remains calm,” wrote the analysts.

“Perhaps in this case the usage of the bitcoin network is lagging behind the prices. Ideally, renewed volatility and constructive price action brings back demand for the block-space. If not, this may suggest that the coming weeks will be a good one.” There is a need for a more cautious framework in the

The last time bitcoin interacted with the $40,000 mark, there was a brief retest from lower levels in mid-June.

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