Bitcoin‘s price witnessed a significant uptick, rebounding by approximately 5% after experiencing a decline to $108,650 last week. This recovery could indicate a crucial turning point in the market, underscored by three vital indicators. The entity-adjusted dormancy flow, a key metric that tracks the behavior of long-term investors, fell to 133,300—an area traditionally seen as an opportune buying moment in the Bitcoin realm.
Is History Predicting a Bullish Phase?
Historically, bounces from these levels often precede substantial bullish trends. A notable precedent occurred in July 2021, culminating in Bitcoin attaining its peak of $69,000 a few months later. This suggests that the current trend could trigger a similar upward trajectory in the market.
How Are Short-Term Investors Faring?
Currently, Glassnode’s on-chain analysis indicates that the net unrealized profit/loss ratio for short-term Bitcoin holders has dipped into negative territory. This means that investors who have held Bitcoin for less than 155 days are mostly at a loss, which might result in heightened selling pressure. However, these so-called “capitulation zones” have historically sparked renewed buying interest. Jack de X, a crypto commentator, remarked,
“This setup points to an early buying phase.”
In terms of technicals, a V-shaped recovery pattern is visible on the 12-hour chart. Since experiencing a 7.8% drop to $108,700 from September 18, Bitcoin has rebounded robustly. The Relative Strength Index (RSI) increase from 27 to 53 supports the current positive trend. Analyst Matthew Hyland emphasizes the presence of a double bottom and an inverse head and shoulders pattern on the daily chart, both of which hint at potential price breakouts. Ethereum recently noticed a similar trend, with its price spiking to $4,100.
Recently, Bitcoin faces a crucial resistance point at $118,000. Moving past this barrier could pave the way for a revisit to the previous high of $124,500. For investors, this scenario presents a possibility for market resurgence, though caution is recommended due to inherent volatility.
– Bitcoin price experiences a 5% rebound from $108,650.
– Entity-adjusted dormancy flow suggests a promising buying zone.
– Short-term holders face losses, hinting at potential market shifts.
– V-shaped recovery and double bottom indicate rising momentum.
Market interpretations from historical, on-chain, and technical angles suggest Bitcoin might be approaching a stabilizing point. However, as these signals do not ensure definite outcomes, it is wise for investors to remain cautious, emphasizing long-term approaches over short-term speculation.
