This is the first indication that the “dust settles” on the cryptocurrency market now that investors believe that the worst of the Terra (LUNA) collapse seems to be over. A look at the Bitcoins chart indicates that while the downturn has been widespread and quite devastating for altcoins, BItcoin (BTC) has actually performed quite well.
Even with the May 12 drop to $ 26,697, which is the lowest price level since 2020, many indicators suggest that current levels could represent a good entry into BTC.
The withdrawal at this point is noticeable in that it was a re-examination of the 200-week exponential moving average Bitcoin (EMA) at $ 26,990. According to cryptographic research firm Delphi Digital, this measure has historically “served as a key area for previous price bottoms.
And it was not just Bitcoin that had a difficult day on May 12th. The Stablecoin market also saw its biggest volatility and deviation from the dollar connection since the beginning of the Terra story, with Tether (USDT) experiencing the largest deviation among the major stablecoin projects as shown in the chart below from blockchain data provider Glassnode.
All of the top four stablecoins in terms of market value have managed to return less than $ 0.001 from their dollar connection, but cryptocurrencies’ confidence in their ability to hold has certainly been eroded by the events of the past two weeks.
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Bitcoin is approaching its real price
As a result of market declines, the price of Bitcoin is now trading closer to what it has been at real prices since 2020.
According to Glassnode, the reality has over the years “provided good support in bear markets and given a signal of the bottom of the market when the market price is below it.
Previous bear markets saw the price of BTC trades below their real for a long time, but the time has actually decreased in each round as Bitcoin spent only seven days below its real in the bear market 2019–2020.
It remains to be seen whether BTC will fall below real prices if current market conditions persist and, if so, how long it will last.
Data on a chain sons that many cryptocurrencies could not resist the temptation to acquire Bitcoin below $ 30,000, which led to an increase in accumulation that began on May 12 and continued until May 15, but some analysts warn against taking this as a sign of rapid recovery place from here.
If the story is any clue, most #BTC Bear Market bottoms are formed rapidly, in a volatile manner
But the accumulation fields that form after that take time
– Rekt Capital (@rektcapital) 13 May 2022
This view was echoed by Delphi Digital, who pointed out that “the longer we see price increases in these areas, the more likely they are to continue.
Delphi Digital said,
“If this happens, look for the following steps: 1) $ 22,000- $ 24,000 weekly build-up and volume build-up support; 2) 2017 recurrence test of all time of $ 19,000– $ 20,000.
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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