All Bitcoin investors are looking for signs that the market is nearing a bottom, but this week’s price action suggests that we are not there yet.
Evidence of this can be found by looking at the monthly performance of Bitcoin (BTC), which was affected by a rapid decline that “translated into one of the largest declines in monthly returns for the asset class in its history,” according to the majority. recent market intelligence newsletter BlockwareSolutions.
Bitcoin continues to trade within a tightening trading range that is slowly compressing lower as global economic tensions rise.
Whether the price continues to trend down is a popular topic of debate among cryptocurrency analysts and the current mainstream opinion points to further downside.
Analysts will remain bearish until $45,000 rebounds
According to Blockware Solutions, there are a variety of indicators that point to a bearish outlook as long as BTC trades below the $45,000 to $47,000 range.
This includes the fact that Bitcoin started 2022 at $46,200, while the 180-week Hull Exponential Moving Average, which gives more weight to recent price action, indicates that momentum for BTC is waning and it currently sits in USD. 47,166.
Short-term holders, defined as those that have been on the market for less than 155 days, have been particularly affected by market weakness with the current short-term holder cost basis at $45,038.
On the whole, these data points suggest that BTC sentiment will remain bearish as long as the price is below $45,000.
Where is the bottom?
Despite the current bearish analysis, there are some signs that the market may be in the process of looking for a bottom.
According to the most recent bulletin from Glassnode Uncharted, following the early May plunge below $30,000 for Bitcoin, “Network activity increased as more supply changed hands while the network lost value.”
According to Glassnode:
“This phenomenon has historically signaled a great buying opportunity.”
To further support the claim that Bitcoin is currently in a good buy zone, The report noted entity-adjusted idle flow, which has been consolidating within an area previously considered a good buy zone.
Blockware Solutions, likewise, sees several data points that suggest the market may be looking for a bottom, including Mayer Multiple, a metric that compares the current market price to the 200-day moving average, which is currently “Close to some of the lowest readings on record.”
While multiple data points confirm that the crypto market is in a bear market, there are signs that the sell-off may be reaching its limit and that the market is looking for a bottom. Where that will be is still unknown, but several indicators are currently pointing to a solid level of support near the $21,000 level.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
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