Bitcoin Shows Signs of Potential Upside as Price Rises Over 3%
Despite some doubts among investors due to the struggle to maintain above $70,000, Bitcoin (BTC) has shown indicators that it could reach new highs reminiscent of its 2016 performance.
Bitcoin Price Movement
The cryptocurrency Bitcoin recently dropped from $70,000 to around $68,000, but it is now rising towards $69,000. Currently, BTC is trading at approximately $68,953.86 with a market value exceeding $1.35 trillion. This upward movement has revived hopes of a significant price increase among investors and analysts.
Renowned crypto analyst Mags pointed out striking similarities between Bitcoin’s current cycle and its cycle in 2016. Specifically, the Relative Strength Index (RSI) has recently turned from overbought territory, reflecting the pattern seen in 2016. Back then, the RSI had increased from 60 to 90 three times before the price peaked. Currently, the RSI has only increased once, suggesting that there could still be a long way to go for a bull rally.
Bitcoin on Exchanges Decreased
Data from CryptoQuant also showed that Bitcoin’s net deposits on exchanges are lower compared to the seven-day average, indicating a decrease in selling pressure. Additionally, the low Miner Position Index (MPI) suggests that miners are selling at a moderate rate. A low MPI typically indicates that miners are holding onto their coins rather than selling them, which is a positive sign for price stability and growth.
In addition, the green funding rate of Bitcoin indicates active buying by derivative investors. However, despite these bullish signals, overall market sentiment is showing a slight downward trend. This is reflected in the red indicators for Coinbase Premium and Korea Premium, indicating a dominant selling sentiment among US and Korean investors.
Bitcoin’s Metrics Show Mixed Signals
Examining the daily chart of Bitcoin provides further insights. The Moving Average Convergence Divergence (MACD) indicator suggests a bullish advantage in the market, while the Chaikin Money Flow (CMF) has recorded a sharp rise. These indicators collectively indicate a high likelihood of Bitcoin entering an upward trend in the near future.
However, it is important to note that not all indicators are aligned with this bullish sentiment. The Money Flow Index (MFI) has started to decline after a sharp increase, indicating a possibility of a price correction in the coming days. This serves as a cautionary note for investors who may be overly optimistic about a continuous upward trajectory.
Disclaimer: The information provided in this article is not investment advice. Investors should be aware of the high volatility and associated risks of cryptocurrencies and should conduct their own research.
You can follow our latest news on Telegram, Facebook, Twitter, and Coinmarketcap.
