The market has seen the price of Bitcoin drop significantly over the past two days, dropping from $64,500 on Sunday to a low of $58,474. Yesterday’s big drop followed an unexpected announcement from the trustee of Mt. Gox exchange, which revealed plans to begin accepting BTC and BCH payments in early July—a move that sent shockwaves through the market.
This news raises urgent questions about the immediate future of the Bitcoin price trajectory. Amid this market turmoil, several prominent cryptocurrency analysts have weighed in, giving their insights on whether Bitcoin might be nearing a bottom. Here’s a deeper dive into their analysis and perspective:
Bitcoin Technical Analysis
Tony “Bull” Severino, Senior Analyst at NewsBTC, provided a technical breakdown of the current situation. Using the Relative Strength Index (RSI), a fast oscillator that measures the speed and change of price movements, Severino showed that the RSI levels are now oversold as they were during the fall of FTX, suggesting the possibility of a cyclical bottom.
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“Bitcoin’s daily RSI is oversold during FTX’s downtrend, indicating a possible cyclical bottom,” Severino said. This analysis suggests that, historically, such levels often precede refinancing or at least price stability.
Volume and Market Behavior
Byzantine General, a broker and market strategist, noted the unusually high volume associated with the price drop. “We’re seeing a very high volume, which can reflect the history of the area,” he said. High trading volumes during a bear market can indicate panic selling, which often self-destructs leading to possible reversals.
Social Media Sentiment
Santiment, an analytics platform that specializes in social metrics, has seen an increase in conversations around the word “down” across social media. “This is one of the highest levels of social superiority and dominance of the word ‘bottom’ that we have seen in the last year,” they reported. Historically, such spikes can indicate heightened market attention that may be associated with significant market movements.
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Historical Patterns and Technical Indicators
Teddy (@TeddyCleps), a cryptocurrency trader, emphasized the importance of historical patterns and certain technical indicators such as the 21-week Exponential Moving Average (EMA). “Historically, each correction in the BTC bull run touched the 21-week EMA before retracing. We are approaching this indicator; if history is any guide, $61k would represent a low,” Teddy explained. The 21-week EMA is an important technical level that many traders watch for signs of long-term trend support.
On-Chain Data Analysis
James Check (@Checkmatey), an on-chain data analyst, shared his approach focused more on value discovery instead of exact timing: “My strategy is not to target low but to get Bitcoin at big discounts, as shown by on- chain metrics such as STH-SOPR and STH-MVRV are both less than 1.” These metrics suggest that short-term holders are selling at a loss, which can be an opportunistic entry point for long-term investors.
I prefer to find sats where both STH-SOPR and STH-MVRV are less than 1.
I don’t look down, I’m looking for reasonable discounts.
Love to see you.#Bitcoin pic.twitter.com/Jou9TSH3A9
— _Checkmate 🔑⚡☢️🛢️ (@_Checkmatey_) June 25, 2024
Historic Second Half Performance
Rekt Capital (@rektcapital) analyzed Bitcoin’s performance in the post-halving period, referring to the event when Bitcoin mining rewards were halved, theoretically increasing its deficit. “BTC has not broken the highs or lost the minimum of its ReAccumulation Range in any post-half period. This historical example suggests that Bitcoin should hold these levels,” he said.
Market Psychology
Cred (@CryptoCred), another respected trader, gave another angle and is not convinced that the bottom is already there: “If this is below BTC, I might miss it. Generally, a market that fails to break down, only to come back and close below later, indicates a legitimate downtrend. I don’t lack, but I don’t buy either.”
At press time, BTC traded at $61,014.
The featured image was created with DALL·E, a chart from TradingView.com
