The global market crisis seen over the past few weeks has shown no sign of slowing down and Bitcoin has certainly been impacted by these – plummeting from a peak in 2020 of $ 10,500 to a low of $ 3800 before. when recovering to about $ 5,173 at the time of writing.
Source: Trading View
You can see the price of Bitcoin here.
An investor in the blockchain and cryptocurrency industry said investors should pay attention to a few key factors that can provide insight into how much it will drop before setting a bottom. long-term.
Based on Bitcoin's recent decline to below the 200-day MA, he believes that Bitcoin can plummet to as low as $ 3,000 before hitting a bottom.
Bitcoin seeks support
The sell-offs in the cryptocurrency market today took place parallel to the US stock market, with the Dow Jones, S&P 500 and Nasdaq all falling nearly 10% today.
Chris Burniske – a partner at hedge fund Placeholder – explained in a recent tweet that he believed Bitcoin could drop as much as $ 3,000 before starting to seek support to enhance his price action.
1 / Lots of people asking where $ BTC bottoms. The short of it is I wouldn’t be surprised to see a retest of our 2018 lows near $ 3000. To explain:
– Chris Burniske (@cburniske) March 16, 2020
“A lot of people ask where is Bitcoin bottom. In short, I wouldn't be surprised to see its price retested to the 2018 low of nearly $ 3,000. ”
This decline – if it becomes a reality – will mark a 40% reduction from current prices and a 70% reduction from the 2020 high set in mid-February.
Burniske explained that he believes that Bitcoin recently broke below the 200-day MA, suggesting that it could drop in the next few weeks before finding significant support.
“Historically, I relied on the 200-week MA (the yellow line below) as a bear market bottom, but we crossed that level, nearly $ 5,500 last Thursday. But the next really strong support level I see is $ 3,000. That is our last bottom ”.
Source: Chris Burniske / Twitter
The aforementioned support level may be enough to motivate BTC to rise higher, which means the market will continue to red blood in the coming days and weeks.
A different perspective on the market
Although the market is more volatile than ever, the data continues to favor the view that prices will soon rebound. An analyst has now presented evidence that Bitcoin has entered a region of value that has rarely occurred in its eleven-year history.
Analyst Philip Swift has posted a chart analyzing the current market value along with the specific Bitcoin movement compared to the purchase price. Known as MVRV Z-score, it proves that traders are currently selling Bitcoin at very low prices.
Market cap has now dropped below Realized cap (the cost basis that bitcoins were purchased at).
Z-score has now dropped back into the green zone.
Such periods have been historically rare and attractive to accumulate Bitcoin.
– Philip Swift (@PositiveCrypto) March 16, 2020
“The market cap has now dropped below the actual market cap (the price at which bitcoin was bought).
Z-score has now fallen back to the green zone.
Such periods in history are very rare and extremely attractive to accumulate Bitcoin. ”
Put simply, Bitcoin hodlers are selling at a much cheaper price than usual. Every time this situation appears, Bitcoin has recovered with a significant positive price movement.
Others also notice the current trend as hodlers are selling at lows. CoinMetrics.io noted that the rate at which Bitcoin is selling at a loss has now reached its highest level in eight years:
Bitcoin SOPR dropped to 0.843 on March 12th, the lowest purchased been since February 2012.
SOPR is the ratio of price sold over the price paid, so a SOPR below 1 signals that investors are selling at a loss. pic.twitter.com/lHIeNuf5EM
– CoinMetrics.io (@coinmetrics) March 16, 2020
“Bitcoin SOPR dropped to $ 0.843 on March 12, the lowest level since February 2012.
SOPR is the ratio of the price sold to the price paid, so the ratio of SOPR below 1 indicates that investors are selling losses. ”
Many reasons exist for such a quick sell-off. Nor is there a lack of FUD around the chaos in the financial space. In addition, many cryptocurrency investors need fiat because of some of the suspension jobs related to the global COVID-19. As a result, they are liquidating a lot of Bitcoin for cash. An increase in activity on Localbitcoins.com is the clearest evidence of increased demand for fiat money.
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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