Bitcoin: indicators show that the bottom has already formed
A number of indicators show that BTC has found the bottom.
Bitcoin is in the undervalued zone after the recent drop.
Puell Multiples and MVRV Odds Recover From Lows.
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It will be fair to say that recently the global financial markets have undergone changes, and bitcoin has become an exception, with some network metrics starting to give bullish signals.
Blockchain data provider Glassnode analyzes bitcoin charts and on-chain metrics to determine the nature of the change in sentiment after the massive sell-off in the digital currency market early last month.
After a 50% collapse four weeks ago, Bitcoin has won back about half of its losses and has repeatedly tested the psychological mark of $ 7000 over the past week. The prospects for the further dynamics of the cryptocurrency are still shrouded in a fog of uncertainty, especially in light of the upcoming halving, which is only 40 days away.
BTC found the bottom?
Most on-chain metrics have bounced from areas that have historically signaled bottoming, the research firm estimates.
On – chain metrics used to assess #Bitcoin market cycles are indicating a potential shift in sentiment.
In the weeks after $ BTC’s price drop, most have bounced out of or sit in zones that have historically signalled bottoms and good entry points.https: //t.co/tdWxHMdbLz pic.twitter.com/4C8ej9xOSz
– glassnode (@glassnode) March 31, 2020
This can be seen in the first chart, which shows the recent low for the period from November 2019 to January 2020, and the fact that the price is now back in this area may signal an accumulation phase..
The second graph shows the percentage of UTXOs (unspent transaction outputs). This indicator bottomed out at 70% in early March and is now rising. The offer-in-profit percentage shows a similar pattern, indicating a recovery in tune with Bitcoin..
The metric is improving
The fourth graph shows the Puel indicator, which is the ratio of the dollar value of the coins issued to its annual moving average. This metric dropped significantly below the price, indicating that bitcoin is overvalued and returned to undervalued levels, which could signal a change in sentiment and the return of bulls..
The MVRV ratio was created by analysts Murad Makhmudov and David Puel to compare the market value of bitcoin to the realized value by dividing one indicator by another.
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This chart shows that the ratio is below zero in the green zone, which indicates the formation of a bottom during the recent decline and the transition to a recovery.
A metric such as reserve risk, depicted in the last graph, is a visualization of the dynamics of confidence among long-term Bitcoin holders in relation to the asset’s price at a particular point in time. This indicator also bounced into the buy zone when Bitcoin collapsed and is now growing.
All six of the aforementioned on-chain metrics that are used to determine market sentiment for Bitcoin signal that the cryptocurrency has already found the bottom and will now continue a smooth recovery..
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