Bitcoin (BTC) bounced significantly after reaching a low of $20,855 and has possibly completed its corrective structure.
BTC has been falling since it broke down from an ascending support line on June 10 (red icon). The decrease has been swift and led to a low of $20,855 on June 14. This is the lowest price since Dec 2020.
The price bounced on June 14 and created a doji candlestick with a long lower wick (green icon). However, despite the bounce, the RSI is still following a descending resistance line. A breakout from this line would be required on order for the bounce to be considered a reversal.
The upward movement since the aforementioned low looks impulsive, due to it being a five-wave increase. Additionally, the price has broken out from a short-term descending resistance line.
Currently, it is facing resistance at $22,650. An increase above this level and its subsequent validation as support would go a long way in suggesting that the bottom is in.
BTC wave count analysis
The short-term wave count suggests that the price has completed a five-wave downward movement (black) measuring from the end of March.
The $20,825 low and subsequent bounce were made at a confluence of Fib targets between $21,850 and $22,650. The targets are given by the 1.61 external Fib retracement of wave four (black) and the length of wave one (white).
So, it is possible that a bottom has been made.
It is no secret that many cryptos have been experiencing a price plunge. As of June 18, the price of the world’s largest digital currency, Bitcoin, fell to about $17,622. This data was taken from Binance. Since then, there have been several conversations as to whether or not that price will be the lowest for the asset. A digital currency analyst from CryptoQuant has revealed the possible price of Bitcoin in the nearest future. CryptoQuant is a recognized digital currency resource platform. According to the analyst, the $17,622 price mark may not be the lowest Bitcoin will see. However, this assumption is not very solid given the level it is at the moment. Crypto Winter Overview Many traders and investors are still doubting if there will be a positive change soon. Several pieces of information state the possibility that Bitcoin will still hit a price mark lower than $20K. Related Reading: Shiba Inu Displays Surprising Price Movement – Can SHIB Ditch The Flatline? The scenario has made several digital currency holders sell off their assets. Also, before now, certain major crypto firms have taken some hard decisions due to the bearish turn of the market. A notable example of these crypto firms is Vauld. According to reports, the crypto lending platform had to suspend withdrawals and reduce its headcount. This was revealed on July 4. Probable BTC Price Going further, a cryptocurrency resource platform analyst, Tomáš Hančar, has explained the possibility of his prediction. According to him, the LTH SORP 20-day chart SMA is projecting a 1/3rd chance of Bitcoin hitting that bottom price mark. The explanation of the indicator (SMA) presented above is an acronym for 20-day chart Simple Moving Average. This represents the LTH SOPR (Long-Term Holders’ Spent Output Profit Ratio. According to the data, the ratio derived has been below the impartial level worth of “one” for up to three months. Drawing from the analyst prediction, this is 1/3rd the level that explains a potential bottoming process. The analyst further explained the function of the 20-day idea of the indicator he used. He cited that the idea of the 20-day indicator was for transferring appropriate standard lines. Buying Bitcoin Is Now, Says Tomáš Hančar After this analysis, Tomáš Hančar concluded that buying BTC should commence now. This is because there will be a strong bounce-off in a short while. But, there is a drawback to be aware of, he added. That is the probability that the digital token will drop below the $20K price mark. According to the crypto market watch data, 47 days have passed since the last new low of Bitcoin price. Related Reading: SOL Loses $40 After The Exploit – What’s The Next Support? Considering this fact, the analyst suggested traders furthermore; he cited that it will be necessary for traders to deploy a potential breakout option. Featured image from Pexels – Chart from TradingView.com
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The Bitcoin long-term holder SOPR may suggest that the crypto has still only gone one-third of the way through the latest bear market. Bitcoin 20-day SMA Long-Term Holder SOPR Has Only Been 86 Days Into Bottoming Zone As pointed out by an analyst in a CryptoQuant post, the crypto is still only 1/3rd of the way into the 260 days average historical bottoming period. The relevant indicator here is the “Spent Output Profit Ratio” (or SOPR in brief), which tells us about whether the average Bitcoin investor is selling at a profit or at a loss right now. The metric works by looking at the history of each coin being sold on the chain to see what price it was last moved at. If this previous selling price was less than the latest BTC value, then the coin has just been sold at a profit. While if the last value was more than the current one, then that particular coin realized some loss. When the value of the SOPR is greater than one, it means the market as a whole is selling at a profit right now. Related Reading: Bitcoin Funding Rates Turn Positive, Why The Rally May Not Be Over On the other hand, the indicator being less than one implies the average holder is moving coins at a loss at the moment. The “long-term holders” (LTHs) is the Bitcoin cohort that includes all investors who have held onto their coins for at least 155 days without selling or moving them. Now, here is a chart that shows the trend in the BTC SOPR (20-day MA) specifically for these LTHs over the the last several years: Looks like the value of the metric has been pretty low recently | Source: CryptoQuant As you can see in the above graph, the Bitcoin LTH SOPR (20-day SMA) dipped below the “one” mark a while back. Also, in the chart the quant has marked all the relevant zones of trend for the indicator in relation to the bear market. Related Reading: Here’s What Bitcoin Institutional Inflows Says About The Month Of July It seems like historical bottoming periods have lasted whenever the metric has been stuck below the breakeven point. On average, past bear markets have lasted around 260 days based on the LTH SOPR. In the current cycle, the coin has so far been 86 days into the bottoming zone. This would suggest that if Bitcoin ends this bear market in about the same time as the average, then the crypto is still only one-third of the way through. BTC Price At the time of writing, Bitcoin’s price floats around $23k, down 2% in the last week. Over the past month, the coin has gained 13% in value. The value of the crypto seems to have been moving sideways during the last few days | Source: BTCUSD on TradingView Featured image from mana5280 on Unsplash.com, charts from TradingView.com, CryptoQuant.com
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The crypto fear and greed index shows that while investors are still cautious, the market sentiment is nonetheless making sustainable recovery. Crypto Fear And Greed Index Surges Up, But Remains In “Fear” Territory As per the latest weekly report from Arcane Research, the market sentiment rose to the best sentiment since April of this year on Saturday. The “fear and greed index” is an indicator that measures the general sentiment among investors in the crypto market. The metric uses a numeric scale that runs from zero to hundred for representing this sentiment. All values above 50 signify a greedy market, while those below the mark suggest fearful investors. Values approaching the end of the range of above 75 or below 25 indicate “extreme greed” and “extreme fear” sentiments, respectively. Historically, bottoms have tended to form during periods of extreme fear, while tops have occurred during the other extreme sentiment. Because of this, some investors believe the former periods bring ideal buying opportunities with them, while the latter ones can be suitable selling points. Now, here is a chart that shows the trend in the crypto fear and greed index over the last year: Looks like the value of the metric has been steadily climbing up in recent days | Source: Arcane Research’s The Weekly Update – Week 30, 2022 As you can see in the above graph, just a while ago, the crypto fear and greed index had been inside the extreme fear territory for a couple of months, making it the longest ever streak of rock-bottom mentality. But, during the last few weeks the indicator has observed some growth as the various coins in the market have simultaneously seen recovery. At the time the report came out (which was yesterday), the fear and greed index had a value of “31.” This implies a fearful market. Today, the sentiment has slightly improved as the value of the indicator is now “34,” which is however still firmly inside the fear territory. The value of the indicator is 34 at the moment | Source: Alternative On Saturday, the metric came close to stepping out of the fear territory as it attained a value of “42.” This happens to be the highest value the indicator has seen since April. But before a breakout into greed could occur, the fear and greed index slumped back down. The latest trend suggests while the market sentiment has been improving, the investors have remained cautious. This may pave way towards a slower, but more sustained recovery in the market. BTC Price At the time of writing, Bitcoin’s price floats around $23.3k, up 9% in the past week. The value of the crypto seems to been trending sideways during the last few days | Source: BTCUSD on TradingView Featured image from Quantitatives on Unsplash.com, charts from TradingView.com, Arcane Research
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