2020 was a turbulent year for Bitcoin and the cryptocurrency market in general, in which the leading digital assets rose to a high of $ 10,500 before facing a major sell-off that sent prices plummeting. to a low of about $ 3,800.
After the capital sell-off, prices rebounded sharply over the past few days and widened further today as they climbed to a high of $ 6,900 on the day so far.
Besides, important data is suggesting that Bitcoin is undervalued despite recovering from recent lows, which could signal plenty of room for BTC to climb in the coming days and weeks.
Bitcoin price is “undervalued” according to important on-chain data
At the time of writing, Bitcoin is trading at $ 6,238, up slightly from the daily low of $ 5,900, but noticeably decreasing from a high of $ 6,900.
Although BTC has overcome solid downtrends in traditional markets for a few days, the strength of the recent uptrend is unclear and appears to be likely to continue to decline.
However, according to data from research and analysis firm on-chain Glassnode, the stock-to-flow model of Bitcoin proves that BTC is currently undervalued.
When deflection is larger than 1, #Bitcoin is overvalued according to S2F.
With a current value of 0.73, Bitcoin is considered significantly undervalued.
– glassnode (@glassnode) March 20, 2020
“Stock to Flow deviation is the price ratio of BTC and the S2F model.
When the deviation is greater than 1, Bitcoin is overvalued according to S2F.
With a current value of 0.73, Bitcoin is considered to be significantly undervalued. ”
Bitcoin price is rising
The abrupt price change from $ 5,260 to $ 6,930 seems to correlate with the massive increase in trading volume on various exchanges. Data from CoinMarketCap shows The total exchange volume increased to more than $ 56.4 billion while its ratio compared to the on-chain volume soaring more than 7 times.
From a technical perspective, Bitcoin has broken out of the symmetrical triangle that it has been operating for the past week. This technical model is a sign of a consolidation phase before prices breakout in a positive direction.
The move above the upper trend line is considered the start of a new uptrend and seems to have encouraged investors to return to the market.
The buying pressure of BTC continues to rise from current levels which could cause the price to increase by 10% to reach the goal of $ 7,600. This objective is determined by measuring the distance between the highest and lowest points of the triangle and adding to the breakout point.
BTC / USD | Source: TradingView
Statistical model “Money in / out around the current price” of IntoTheBlock estimate There is minor resistance in the range of $ 6,600 – $ 7,050, of which 626,000 addresses have purchased over 350,000 BTC. However, the most significant resistance level is in the range of $ 7,050 – 7,400 at which 637,000 BTC are HODLed by more than 1.2 million addresses.
If Bitcoin can overcome this important barrier, it will rise to $ 7,600 or higher.
Money in / out around current price | Source: IntoTheBlock
Safe shelter feature
The sustained rise will help King Coin look like what gold did during the 2008 global financial crisis:
In 2008, gold & stocks initially sold off in tandem before gold decoupled and rebounded sharply in November.
History doesn’t repeat itself but given the amount of fiscal and monetary stimulus incoming bitcoin bulls will be hoping that it rhymes! pic.twitter.com/ASOfIVh31N
– skew (@skewdotcom) March 18, 2020
“In 2008, gold and stock were initially sold off in tandem before gold broke off and recovered strongly in November. History is not repeated but with the amount of financial and monetary stimulus that will bring Bitcoin bulls. ray of hope! ”
During that time, gold as well as traditional markets plunged before the precious metal split.
Data analysis firm believes that monetary and fiscal stimulus could push Bitcoin out of the downtrend formed in mid-February. According to CEO Catherine Coley of Binance.US, this makes Bitcoin attractive. as a safe haven and clearer deflationary assets.
Head of research Denis Denis Vinokourov at Bequant said “Deviations” from traditional markets can represent Bitcoin's “victory”, boasting its unrelated and asymmetric performance.
Although it remains to be seen whether the leading cryptocurrency will continue to separate from global economies, Wall Street and VP Tone Vays traders at JP Morgan Chase positive This is the opportunity that investors are waiting for.
Under current market conditions, Vays prefer to open long positions rather than short.
For those that “Bought the Dip” under $ 4k lock it down as #HODL. For those that missed it, I am comfortable buying it here, but also setting $ BTC Limit orders at $ 4,550, $ 3,550 & my ALL IN is at $ 2,750-2,950!
Can’t see #Bitcoin going lower for those waiting on sub $ 2k
– Tone Vays – TheFinancialSummit.com (@ToneVays) March 13, 2020
“For people who” Buy Dip “for less than 4K, get HODL BTC. For those who have missed it, I'm free to buy here, but also put BTC limits orders at $ 4,550, $ 3,550 and all of mine at $ 2,750-2,950!
Bitcoin cannot fall below $ 2K. ”
Is BTC still able to decline before starting to rise steadily?
Although the current outlook looks good, there is a possibility that BTC will continue to decline in the short term.
Renowned analyst and trader TraderXO on Twitter explained in a recent tweet that BTC is positioned to trade lower in the short term due to a strong rejection at recent highs, which could result in a bottom of 4,000. dollars.
$ BTC Few charts flying around pointing straight to 9k
Here is one scenario I'm looking at – Targeting 6k, then 5.5 and possible we retest 4’s
The key for me is if price can hold at the weekly 200MA if we were to retest the level. pic.twitter.com/DOVlaboT0j
– TraderXO (@ TraderX0X0) March 20, 2020
“There is almost no BTC chart showing that prices will fly straight to 9K
Here's the scenario I'm considering: Target 6K, then 5.5K and possibly retest 4K.
The bottom line is if the price can hold at MA 200 weekly and retest this level. ”
If the 200-day MA of the cryptocurrency is retested, the bull's ability to protect this level will be critical to driving prices higher in the days and weeks to come.
You can see the price of Bitcoin here.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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