Like clockwork, the beginnings of the cryptocurrency market have highlighted the “Bitcoin is dead” crowd, which is celebrating the end of the largest cryptocurrency with a market value.
Ef #Bitcoin can collapse by 70% from $ 69,000 to under $ 21,000, it can just as well fall by another 70% down to $ 6,000. In view of excessive indebtedness in # cryptography, imagine the forced sales that would take place at a sale of this magnitude. $ 3,000 is a more likely price target.
– Peter Schiff (@PeterSchiff) June 14, 2022
The last few months have certainly been painful for investors and the price of Bitcoin (BTC) has fallen to a new low in 2022 to $ 20,100, but most likely the latest call for the death of the asset will suffer the same fate as the previous 452 forecasts. before its death.
Certain Bitcoiners have a bag full of gimmicks and chain metrics that they use to determine when BTC is in the trading area and now is the time to take a closer look. Let’s see what time-tested metrics say about Bitcoin’s current price action and whether the 2021 bull market was BTC’s last hurray.
Some traders always buy a bounce of the 200-week moving average
One measure that has historically served as solid support for Bitcoin is its 200-week moving average (MA), as shown in the following table. insert by marketing expert Rekt Capital.
As shown in the area marked by the green circles, the lows reached in previous bear markets have occurred in areas close to 200-MA, which has in fact stood out as a major level of support.
Most often, BTC prices have tended to briefly fall below this measure and then slowly work their way back above 200-MA to start a new rise.
Currently, the BTC price is trading at 200-week MA after briefly dipping below the benchmark at the June 14 sale. Although a reduction is possible, history suggests that the price will not fall too far below this level for a. longer time.
Price support for many years should be maintained
Along with the support from the 200-week MA, there are also some interesting prices from the past Bitcoin that should now act as support if the price continues to fall.
The last time BTC traded below $ 24,000 was in December 2020, when $ 21,900 acted as a support level that Bitcoin bounced off in the run-up to $ 41,000.
If $ 20,000 is not supported either, the next levels of support are close to $ 19,900 and $ 16,500, respectively. Showed in the table above.
Connected: ‘Too early to say that Bitcoin prices have regained key support in the bear market – Analysis
MVRV indicates the time to start collecting
One final measure that suggests that BTC may be approaching the optimal accumulation phase is the market value-to-redeem-value ratio (MVRV), which currently sits at 0.969.
As shown in the chart above, MVRV scores for Bitcoin have spent the most time over the past four years above value 1, with the exception of two short periods that coincided with bear market conditions.
The short decrease that took place in March 2020 saw the MVRV score go as low as 0.85 and was below 1 for a period of approximately seven days, while in the bear market from 2018 to 2019 the measured value was as low as 0.6992 and spent a total of 133 days below the value 1.
Although the data does not deny that BTC could see further price increases, it also indicates that the worst setbacks have already taken place and that current extremes are unlikely to continue in the long run.
The views and opinions expressed herein are those of the authors only and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading business involves risk, you should conduct your own research when making a decision.
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