As a seasoned researcher with over two decades of experience in the financial markets, I have witnessed numerous market cycles and learned to read between the lines of various indicators. Based on my analysis of Bitcoin’s current situation, I believe we might be seeing the signs of a bottom forming.
Bitcoin has been relatively steady in its writing, but it dipped below $60,000 following an optimistic surge during the second half of last week. In the short term, it seems that the direction of travel is upward, as prices are contained within the bullish engulfing bar of September 13, despite some weakness.
Is The Bitcoin Bottom In?
As prices decrease, on-chain indicators suggest robustness and potential formation of a base for the most valuable cryptocurrency in circulation. According to one analyst speaking on platform X, using data from CryptoQuant, the Mayer Multiple – a sentiment measurement tool – is decreasing.
In simpler terms, the analyst notes that the Mayer Multiple has dropped from 1.82 to 0.9. Although it has decreased, it may still fall further. As per the trader’s viewpoint, if sentiment weakens and the reading drops to 0.7, it could indicate a market bottom. From the price trend, this potential bottom is estimated to be between $46,000 and $50,000.
All the same, it should be noted that the Mayer Multiple, though useful, is a lagging indicator. It is calculated by dividing the spot BTC price by the 200-day moving average. If the reading is below 1, it points to a possible undervaluation, as is the case.
In simpler terms, the upward trend of Bitcoin continues to hold firm as per its daily chart analysis. Although the price currently hovers below $60,000, it still falls within the bullish candle formed on September 13th. This means that, considering the amount of effort put in versus the outcome gained so far, the situation is advantageous for Bitcoin buyers since the recent drop coincides with lighter trading volume.
If Bitcoin maintains its value above approximately $56,500, there’s still a possibility for potential buyers. For even more promising prospects, look forward to Bitcoin surpassing and closing above the weekly high it reached last week, which was about $61,000.
Hints From The Futures Market
Apart from the Mayer Multiple suggesting potential price stabilization and optimism about a price floor, the analyst remains optimistic, anticipating the cryptocurrency will receive support. In the Bitcoin futures market, there are signs of robustness.
According to CryptoQuant data, the Bitcoin Futures Sentiment Index is on an upward trend lately. Historically, when this index starts climbing, Bitcoin’s price often follows suit, moving up in sync.
As a researcher studying the cryptocurrency market, I find this development particularly promising. However, for Bitcoin’s bullish trend to continue and potentially breach new heights, it is crucial that we, as investors, work together to push prices beyond the immediate local resistance levels. A successful, high-volume close above $69,500 could ignite a wave of market FOMO (Fear of Missing Out), which in turn might propel the coin towards uncharted territories.
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2024-09-17 08:11