Bitcoin Shows Signs of Potential Upside as Price Rises Over 3%
Despite some doubts among investors due to the struggle to hold above the $70,000 level, certain indicators have shown that Bitcoin (BTC) could be on the verge of reaching new highs reminiscent of its 2016 performance.
Bitcoin Price Movement
The cryptocurrency Bitcoin recently dropped from $70,000 to around $68,000 but is now rising towards $69,000. Currently, BTC is trading at approximately $68,953.86 with a market cap exceeding $1.35 trillion. This upward movement has revived hopes of a significant price increase among investors and analysts. Access NEWSLINKER for the latest technology news.
Mags, a prominent crypto analyst, has drawn attention to the striking similarities between Bitcoin’s current cycle and its cycle in 2016. In particular, the Relative Strength Index (RSI) has turned from overbought territory and mirrored the pattern seen in 2016. During that period, the RSI rose from 60 to 90 three times before the price of Bitcoin peaked. Currently, the RSI has only risen once, indicating that there may still be a long way to go for the bull rally.
Bitcoin on Exchanges Decreased
Data from CryptoQuant also showed that Bitcoin’s net deposits on exchanges were lower compared to the seven-day average, indicating a decrease in selling pressure. Additionally, the low Miner Position Index (MPI) suggests that miners have been selling in a moderate manner. A low MPI typically indicates that miners are holding onto their coins rather than selling them, which is a positive sign for price stability and growth.
Furthermore, the green funding rate of Bitcoin indicates active buying by derivative investors. However, despite these bullish signals, overall market sentiment is showing a slight downward trend. This is reflected in the red indicators for Coinbase Premium and Korea Premium, indicating a dominant selling sentiment among U.S. and Korean investors.
Bitcoin’s Metrics Show Mixed Signals
Examining the daily chart of Bitcoin provides more information. The Moving Average Convergence Divergence (MACD) indicator suggests a bullish advantage in the market, while the Chaikin Money Flow (CMF) has recorded a sharp increase. These indicators collectively indicate a high probability of Bitcoin entering an upward trend in the near future.
However, it’s worth noting that not all indicators align with this bullish sentiment. The Money Flow Index (MFI) has started to decline after a sharp increase, indicating a possibility of a price correction in the coming days. This serves as a warning for investors who may be overly optimistic about a continuous upward trajectory.
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Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
