Analysts say that Bitcoin may see “smaller retracements and faster bottoms”

A loyal supporter of cryptocurrency got Freed from the recent market struggles Thanks to a rally Decentralized Finance (DeFi) Tokens and Dogecoin (dog) June 2nd. The price of Ether has a slight breakthrough (Ethereum) And Bitcoin (Bitcoin) May also boost market sentiment, but at present, the top digital assets are still encountering resistance at key resistance levels.

Data from Cointelegraph Markets Pro with Transaction view It shows that the price of Bitcoin rose 7.3% from a low of $35,645 on June 1 to an intraday high of $38,250 on June 2, while the price of Ethereum also rose by 7.7%, briefly returning to a low of $2,800. Support level.

Although the price increase has caused many people to call for the 2021 bull market to continue, some analysts emphasized the possibility of Bearish pennant On the Bitcoin chart, this could cause the price to fall to $16,000.

Bitcoin pennant structure and its main downside targets. Source: TradingView

The top of the market or the bull market respite?

The volatile price trend of Bitcoin in the past month has caused many people to speculate whether Bitcoin is at the top, or whether the current correction is just a mid-cycle respite. Once the rebound resumes, it will prepare for the continuation of the asset.

The recent Delphi Digital report discussed the MVRV ratio, which provides a deeper understanding of the problem, which is an on-chain indicator that measures the market value of Bitcoin (MV) and its realized value (RV). As an indicator, you can Help traders determine the top and bottom of the market.

Bitcoin MVRV ratio and price. source: Delphi Digital

The chart above shows that the MVRV ratio was over-expanded in early 2011, late 2013, and early 2018, “all of these represent the top of the cycle,” as Delphi Digital emphasized. The researchers also suggested that “the May 2021 reading is likely to indicate the peak of this cycle.”

Although the current cycle may reach its peak, Delphi Digital also pointed out that the market is likely to “see results similar to the’double bubble’ in 2013, in which BTC created ATH [all-time high], The price fell sharply, and then far exceeded ATH in the same year. “

The report further emphasized the fact that the threshold for determining the bottom of Bitcoin has increased over time, which may change the pattern of the bull market in the next few years.

According to Delphi numbers:

“In view of the sharp decline in MVRV so far, it is possible for BTC to have a smaller retracement and a faster bottom compared to the previous cycle. This will be similar to global stocks, with several months of corrections and multi-year bull market cycles. .”

As a note, the report does point out that although there are “a lot of conflicting data and sentiments” in the market at present, “there may be a mean reversion in the next few weeks because the price is far away from its 50-day moving average.”

BTC basic situation: mean reversion. source: Delphi Digital

“Historically, the price of BTC has been quite close to its 50-day moving average. Looking at the previous retracements, BTC always showed a healthy rebound after deep retracements. This is the result of natural market reflection.”

Altcoins perform double-digit gains

In the price trend on June 2, altcoins achieved double-digit gains. Among them, the price of Kyber Network’s KNC token rose by 53% and is now back to more than $2.50. KAVA has also risen by 37% and is currently trading at close to US$4.70.

Daily cryptocurrency market performance. source: Coin 360

Dogecoin, Kusama’s KSM token, and Curve DAO’s CRV token also helped lead the rise of altcoins, with prices rising by about 25%, while OKB was up 33%, and the transaction price was close to $17.70.

The overall market value of cryptocurrencies is currently $1.709 trillion, and Bitcoin’s dominance rate is 41.5%.

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