Cryptocurrency News

Bitcoin price moves towards $40K as on-chain and technical analysis favors the bulls

bitcoin (B T c) saw a bullish event on June 13 as the price broke $39,252, but many analysts are still on the fence when it comes to determining whether the digital asset is ready to continue its uptrend.

To date, the crypto market remains on the edge and has eluded Bitcoin’s all-time high of $65,000 by close to two months. A market analysis by Delphi Digital identified a “key head and shoulders pattern” that “could cause more short-term pain if BTC breaks below $30,000.”

With that in mind, it’s a good time to review some key data points to get more perspective on where the price of bitcoin may be headed next.

Short-term holders suffer

The 50% price drop over the past two months may seem extreme to those unfamiliar with the volatility of the cryptocurrency market, but it should come as no surprise to long-term holders who have made several gains of even greater magnitude in the past few days. have seen a decline. decade.

Bitcoin price has declined from a 52-week high. Source: Delphi Digital

As seen in the chart above, it is not unusual for BTC to drop by 70% or more, especially after a significant increase in price, indicating that the potential for further pain is still a threat as The bulls are fighting in the mid-$30,000s. .

The sharply falling price sent bitcoin holders new and old over the edge, resulting in losses for traders according to SOPR (Spent Output Profit Ratio) data highlighted by cryptocurrency analyst filbfilb.

Bitcoin spend output profit ratio. Source: centrifuge

Signs of a SOPR reset have been visible over the past few days, indicating that the average wallet is now again selling at a profit.

The Crypto Fear and Greed Index (CFGI) has also hit its lowest level since the selloff triggered by the Covid-19 pandemic in March 2020.

BTC drawdown vs crypto fear and greed index. Source: Delphi Digital

The fear of the higher levels currently experienced by most traders has left many sitting on edge as the worry of further losses remains a valid possibility.

For investors, however, a low score on the index is “a sign of being greedy when others are fearful.” As Warren Buffett would say, and the chart above shows, buying during moments of high fear is a good entry-level. it happens.

related: Here’s How Bitcoin’s Imminent Death Cross Could Be An Opposite Buy Signal

Sentiment starts to rebound

While it is true that the price of bitcoin has seen a drop of over $30,000 over the past two months, it is important to note that this amount has fallen as well as its current price is almost double the previous all-time high set in 2017. . Throw light on how significant the rally has been over the past six months.

on-chain analysis centrifuge shows that an ‘oversold’ signal was recently triggered, “suggesting that BTC may soon be ready for a rebound and an upward move.”

Bullish signal provided by Active Address Sentiment Indicator. Source: centrifuge

The Active Address Sentiment indicator compares a 28-day change in price shown by an orange line with a 28-day change in an on-chain active address, represented by a band of gray lines.

The orange line moving back from below the dotted green line to the active address change band is considered a bullish signal, and most recently occurred on June 10, indicating the potential for a market turnaround.

According to Reckitt Capital, a popular analyst on Twitter, Bitcoin is still on its way to a new all-time high.

For now, it’s probably best to take a break from staring at the charts and worrying about which way bitcoin will pick. The long-term outlook remains strong as countries such as El Salvador has started picking up BTC More people are interested in cryptocurrency as a legal tender.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, so you should do your own research when making a decision.