Bitcoin has been on a rollercoaster in recent months, falling for the first time in nearly a year in the past week. The price has dropped by as much as 40% since mid-December, and now sits around $13,500. Bitcoin had been trading in a range between $17,000 and $13,000, climbing from its low of $13,000 in late-November and then falling to around $17,000 in mid-December. The price of Bitcoin has even nosedived from around $19,000 in late-December to around $12,000 in mid-January, after the U.S. Securities and Exchange Commission (SEC) denied the Winklevoss brothers’ Bitcoin ETF. ~~
Over the years, BTC has been one of the most volatile cryptocurrencies. But, this year, it has been more stable than ever, shooting through the roof in January and now down around $3000. If you look at the two main indicators of BTC price movements, the 2-day moving average and the 20-day moving average, you can see how the market is currently behaving.
In my recent analysis of Bitcoin price indicators I found that the two most important Bitcoin price indicators suggest that Bitcoin has not bottomed yet. The first Bitcoin price indicator is the momentum indicator, which is the total amount of Bitcoin that has moved up or down in the last 24 hours. The second Bitcoin price indicator is the relative strength index (RSI), which measures the relative strength of a currency’s price movement compared with the price movement of a currency in general and is shown below.. Read more about bitcoin price correction and let us know what you think.Traders use different strategies to determine if the bitcoin price has bottomed, but blockchain activity and derivatives data suggest it remains volatile. Has the price of bitcoin reached its low point yet? According to @noshitcoins, derivatives and channel data indicate a possible continuation of the decline. Since bitcoin (BTC) began trading on the 12th, traders have been trying to predict the long-awaited trend reversal. In May, a 48% correction to $30,000 began. This has led to the liquidation of $12 billion of long positions in the futures markets and to date, traders’ confidence remains somewhat mixed. The community has been looking everywhere for signs of a turnaround, including technical models, U.S. CPI inflation data and bitcoin exchange rate deposits. Thus, according to some analysts, a higher top followed by a rise above $40,000 would be sufficient. We need to form a new higher top to confirm the local low. Bring back 40k and we can start talking about a sustainable move to 50k. #Bitcoin pic.twitter.com/myeWXIYWpp – Inmortal (@inmortalcrypto) 24. May 2021 Two days later, however, bitcoin managed to break through the $40,000 mark, although the move lasted no more than six hours. Meanwhile, other traders have pointed out that a retest of the lower $30,000 level is necessary for a rebound. #Bitcoin $BTC #BTC is forming a downward-sloping shear here. This is an uptrend, but there are two possible scenarios. Green: Overcoming resistance and maintaining the uptrend. Red: retest of lower chamfer limit (~30k) and bounce from there pic.twitter.com/8L26kQvf7X – Johnny Woo | Never DM you for Money (@j0hnnyw00) May 25, 2021 While these claims can be supported empirically or even logically, market prices do not always respond to external news or previous chart formations. Unlike stocks, bitcoin investors cannot rely on widely accepted valuation multiples or even comparable measures. Of course, the digital storage of value is a utilitarian object, but at the same time it is non-censorable and easily transferable. In addition, some users appreciate the ability to convert bitcoin funds into peer-to-peer currency outside of KYC-regulated exchanges. Another factor to consider is that investors are increasing their bitcoin holdings due to the lack of correlation with traditional financial assets. This variety of different and sometimes conflicting reports makes it difficult to model market potential, determine the state of adoption, and even measure the effectiveness of recent developments. Some will applaud Tesla and large companies creating bitcoin stocks, while others won’t care who owns the BTC and will focus on issues of scalability and redeemability.
Tilted position: Indicator of occupational anxiety and greed
Call options allow the buyer to buy bitcoins at a fixed price on the expiration date of the contract. Put options, on the other hand, are insurance for buyers and protect them from price declines. When market makers and professional traders lean upwards, they demand a higher premium for call options (to buy). This trend leads to a negative skew of 25% in the delta indicator. On the other hand, if fall protection is more expensive, the asymmetry indicator becomes positive. bitcoin 30 day options 25% delta skew. Source : laevitas.ch A delta of 25%, ranging from 10% negative to 10% positive, is generally considered neutral. This balanced situation lasted until May 16, when bitcoin lost the critical support of $47,000, which held for 76 days. As markets deteriorated, so did the 25% delta skew, and the value of protective options rose sharply. Therefore, it seems premature to think that the market has bottomed until the ratio establishes a more neutral pattern near the 5% level.
Active bitcoin launch gives weak hands the signal to cool down
Traders also keep track of the number of BTC that have been active recently. This indicator alone cannot be considered bullish or bearish because it does not provide information about the age of the addresses in question. Active offer with at least one exchange in the last 30 days. Source: CoinMetrics A price increase of 500% since Oct. 1, 2020, and a high of $64,900 on Oct. 14, 2020, has been achieved. In April 2021, supply increased significantly in the months leading up to the rally. If this ratio falls sharply, it indicates that investors are no longer interested in participating at the current price level. Currently, 2.2 million BTCs are active in the last 30 days, which is well above the pre-October 2020 level. At this point, traders should not think that bitcoin has bottomed, at least not until activity around $40,000 has faded from the market. The views and opinions expressed herein are those of the author and do not necessarily reflect those of Cointelegraph. Every investment and every stage of trading involves risk. You should do your own research before making a decision.The Bitcoin price has been on a steady slide over the last week, and we are now down more than 50% from the all-time high. As the price continues to drop, more people are asking the question: is it finally time to cash out? While there are a few indicators that suggest price bottomed in the last 3 or 4 weeks, the chart below highlights two that suggest we’ve not seen the bottom yet.. Read more about bitcoin consolidate and let us know what you think.
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