Contrasts Bitcoin investors identify in trading areas even where great fear grips the market

Contrasts Bitcoin investors identify in trading areas even where great fear grips the market – Mail Bonus

Support for bitcoin (BTC) at the $ 30,000 level has proved quite resilient amid turmoil over the past two weeks with many symbols in the top 100 now showing signs of consolidation after prices plummeted from recent lows.

Fear and greed. Source: Alternative.me

During high volatility and sales, it is difficult to take a opposite view and traders might consider putting some distance from all the noise and negative news flow to focus on their core beliefs and reason for initially investing in Bitcoin.

Several data points suggest that Bitcoin may be nearing the bottom, which is expected to follow a long period of compression. Let’s see what the experts are saying.

BTC may have already reached “maximum pain”

The increase in Bitcoin owners’ realized losses was touched by a ‘Root’ pseudonymous analyst who tweeted the following table and said that the implemented loss was “to reach a peak in the bear market.

Bitcoin redeemed profit / loss. Source: Twitter

Although previous bear markets have seen more redemption losses than now, they also suggest that the pain could soon begin to subside, which would allow Bitcoin to begin a slow path to recovery.

Analysts have also pointed out that “RSI Bitcoin is now entering a period that has historically preceded a large return on investment for long-term investors.”

BTC / USD RSI. Source: Twitter

According to Rekt Capital,

“The first turnaround from this area includes January 2015, December 2018 and March 2020. The market is all bottoming out.”

Strong hands hold tight

Additional evidence on the chain that Bitcoin could soon see a revival was provided by Jurrien Timmer, Fidelity’s international director of macros. According to the Bitcoin Dormancy Flow, a measure that shows a resting flow for Bitcoin that “roughly is a measure of strong versus weak hands.”

Bitcoin hibernation flow. Source: Twitter

Timmer said:

“Entity-adjusted residency from Glassnode is now at its lowest level since the 2014 and 2018 lows.

One measure that suggests the weak hands may be approaching the warrior is the Advanced NVT signal, which looks at the net value to conversion rate (NVT) and contains standard deviation (SD) bands to identify when Bitcoin is overbought or oversold.

Advanced NVT signal. Source: LookIntoBitcoin

As shown in the table above, the sophisticated NVT signal highlighted with light blue is now more than 1.2 standard deviations below the average, indicating that Bitcoin is oversold.

Previous cases where the NVT signal has fallen below the -1.2 SD level have been followed by increases in BTC prices, although it can sometimes take several months to emerge.

Connected: Bitcoin price forecasts are high as traders focus on the next BTC halving cycle

Hash rate reaches a new high in history

Aside from complex chain measurements, there are several other factors that suggest that Bitcoin could see an increase in momentum in the near future.

Data from Glassnode show that the hashrate for the Bitcoin network is now at an all-time high, indicating that there has been a significant increase in investment in mining infrastructure, with the greatest growth taking place in the United States.

Bitcoin means hash rate against BTC price. Source: Glassnode

Based on the chart above, BTC prices have historically been higher in line with increases in average hash rates, suggesting that BTC may soon rise.

Finally, one can only hope to look at the Google Trends data for Bitcoin, which indicates increased search interest in the wake of the recent market downturn.

Interested in looking for Bitcoin over time. Source: Google Trends

Previous increases in Google search interest have largely coincided with a rise in Bitcoin prices, so it is possible that BTC could at least see some relief in the near future if investors on the sidelines see this as an opportunity to scoop up some Satoshis at a discount.

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.