Bitcoin (BTC), which recently reached a new high of $126,199, is consolidating at the lower end of the $120,000 price range. Latest exchange data – such as Cumulative Volume Delta (CVD) Confirmation Score – suggests that BTC is benefitting from strong underlying demand.
CVD Confirmation: Bitcoin Demand is Strong
According to a CryptoQuant Quicktake post by contributor Arab Chain, Bitcoin’s CVD Confirmation Score – a 30-day rolling correlation between Bitcoin’s price and the CVD – is suggesting a strong resynchronization of the trend.
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The CVD Confirmation score is a measure of the correlation between Bitcoin’s price over a 30-day period and the CVD. This CVD measures the difference in volume between the takers and sellers on the exchange. High scores (above 0.70) indicate that real buyers are driving price rises, whereas a score below 0.7 indicates weak momentum or speculation.
Binance’s latest data shows the CVD confirmation score is currently around 0.8-0.9. This indicates that current price increases are mainly driven by taker buying, rather than technical rebound or short squeeze.
Price corrections are usually shallower and shorter-lived when this number is around 0.7. It is due to the fact that any new supply of BTC quickly gets absorbed by market liquidity.
The CryptoQuant analyst remarked that if the CVD Confirmation Score continues to hover above 0.7 – coupled with a decisive breakout above the $124,000 – $126,000 resistance zone – then it could be on its way to a potential target The price can go up to $135,000.
Any negative divergence between the BTC Price rising and CVD confirmation score dropping below 0.4 is a sign of caution, since it can increase distribution pressure or liquidity.
Conversely, the $112,000 – $115,000 and $108,000 – $110,000 stand out as strong support levels for BTC. CVD Confirmation Scores should be stable at these levels to keep the trend going. Arab Chain has added:
Binance is the largest exchange in terms of volume. The trend is positive. Three confirmation signals should be monitored: CVD Confirmation is high, the open interest level remains modest, and funding doesn’t become excessive. A clear disparity between these metrics is the first sign of a shift in momentum.
BTC due for a correction?
Analysts believe that BTC will continue to rise, despite the bulls’ hopes. aren’t quite convinced The digital currency is expected to reach new heights soon. Crypto analyst ZVN, for example, recently stated BTC’s next jump to $150,000 may be accompanied by a drop.
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Dick Dandy is another crypto analyst that recently shared similar thoughts. predicted BTC’s price could drop by 60%, to as low as $43,900. BTC was trading at $118.791 as of press time. This is down 1.8% over the past 24 hour.
Charts from TradingView.com and CryptoQuant.com.
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Source: www.newsbtc.com
