Bitcoin (Bitcoin) The price made a bullish turn on June 13 and the price broke through to $39,252. However, many analysts remain on the sidelines when determining whether the digital asset is ready to continue its upward trend.
So far, the cryptocurrency market is still on the fringe, and Bitcoin is still two months away from its all-time high of close to $65,000. A market analysis by Delphi Digital identified a “major head and shoulders pattern”. If BTC drops below $30,000, it may “bring more short-term pain.”
With this in mind, now is a good time to look at some key data points to better understand the next move of the Bitcoin price.
Short-term holders suffer losses
For those unfamiliar with the volatility of the cryptocurrency market, a 50% price drop in the past two months may seem extreme, but for long-term holders, this is not surprising, as they have seen many large Withdrawal for ten years.
As shown in the figure above, it is not uncommon for BTC to retrace by 70% or more, especially after the price has risen sharply. This shows that as the bulls fight the bears in the $30,000 range, the possibility of further pain is still a Threatened.
According to the SOPR (Spent Output Profit Rate) data highlighted by cryptocurrency analyst filbfilb, the rapidly falling price has left new and old Bitcoin holders on the sidelines, causing traders to sell at a loss.
There have been signs of SOPR reset in the past few days, which indicates that ordinary wallets are now profitable again.
The Crypto Fear and Greed Index (CFGI) also reached its lowest level since the sell-off triggered by the Covid-19 pandemic in March 2020.
The high level of fear that most traders currently experience has left many people on the sidelines because they fear that further losses are still a reasonable possibility.
However, for contrarian investors, the low score of the index is a signal of “greed when others are afraid”. As Warren Buffett said, the above chart shows that buying at times of high fear is often a very Good entry level.
Emotions start to rebound
Although the price of Bitcoin has indeed fallen by more than $30,000 in the past two months, it is important to note that its decline and current price are almost twice the record highs set in 2017, shining brightly. Understand the importance of the rebound in the past six months.
On-chain analysis comes from Diffuser It shows that the “oversold” signal has been triggered recently, “indicating that BTC may soon be ready to turn up.”
The active address sentiment indicator compares the 28-day price change shown by the orange line with the 28-day change of the active address on the chain represented by the gray line.
The return of the orange line from below the green dotted line to the effective address change zone is considered a bullish signal. The most recent one occurred on June 10th, indicating that the market may turn around.
According to popular analyst Rekt Capital on Twitter, Bitcoin is still on its way to a record high.
This #BTC The halving (blue) occurred one year before the new candle 1
Candle 1 is Bitcoin Experienced the most explosive growth
— Rekt Capital (@rektcapital) June 13, 2021
For now, it may be best to stop staring at the chart for now and worry about which way Bitcoin will choose.Long-term prospects remain strong because countries like El Salvador has begun to choose BTC With fiat currency and more and more people are interested in cryptocurrency.
The views and opinions expressed here only represent the views of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading action involves risk, and you should conduct your own research when making a decision.