The price of bitcoin has reached the bottom; Where is the real floor?
While various indicators suggest that now may be a good time to buy bitcoin, some analysts have warned that the price of this digital currency may continue to fall to lower levels.
To Report Coin Telegraph Many investors are looking for signals that Bitcoin is at its price floor. However, the price trend of this digital currency last week showed that the market has not reached this point yet.
To prove this, we can look at the Bitcoin monthly return chart, which shows a steep downward trend. According to the Blockware Institute’s newsletter, this downturn is one of the biggest downtrends in Bitcoin history and its monthly return chart.
Bitcoin continues to fluctuate sharply in the trading range. Rising economic pressures around the world have also put more pressure on this digital currency, pushing it slowly downwards.
Many digital currency analysts are now trying to figure out if Bitcoin is still in decline. It should be noted that most of them think that the answer to this question is yes.
In what case can it be said that the downtrend is over?
According to the BlackBerry Institute, various indicators show that the trend will continue to decline until Bitcoin returns to the range of $ 45,000 to $ 47,000.
The forecast is based on the fact that Bitcoin started 2022 at $ 46,200. Meanwhile, the Hall’s 180-week moving average (EHMA) indicates that the price trend of this digital currency is declining. The moving average is currently at $ 47,166, adding more weight to the current bitcoin downtrend.
Short-term hoodlers, which have been on the market for less than 155 days, have been severely affected by the downtrend; Because they spend an average of $ 45,038 to buy each bitcoin.
As a result, given these data, it can be said that as long as the price of Bitcoin is less than $ 45,000, traders’ feelings for this digital currency will continue to decline.
Where is the Bitcoin price floor?
Despite all these not-so-promising analyzes, there are indications that Bitcoin is probably looking for a price floor.
According to the analytical website Glassnode, after the fall of Bitcoin below $ 30,000 in early May, the network activity of this digital currency increased and at the same time, as its price decreased, more volume of this digital currency became available.
Golsnood said:
This (the fall of the NVT index) in the history of Bitcoin has always been a sign of a great buying opportunity.
To prove that Bitcoin is in a good buying area, Golsnood referred to the Entity Adjusted Dormancy Flow Index. This index is a measure of the ratio of the total value of bitcoins in the market cycle to units that have remained intact for a long time and are now established in areas that were previously considered an optimal buying area.
Blockwire has also found various data that indicate that bitcoin may be in search of its bottom. One of these data is the Mayer Multiple coefficient. The Mayer coefficient compares the current price of Bitcoin to its 200-day moving average and is currently near one of its peaks.
Although various data confirm that the bitcoin trend is still declining, there are data that indicate that the pressure of sellers has reached its peak and the market is probably looking for the bitcoin price floor. It is not yet clear exactly where this floor is; But there are now several indications that the $ 21,000 support area could be the bottom of the bitcoin downtrend.