Bitcoin is currently trading at around $20,938, losing 4% in price. Despite last week’s gains, it ended the week with a loss, which extended into today. There has also been an increase in volume and flow of funds into exchanges over 24 hours.
Signs of a Potential ‘Macro Bottom’
The weekly relative strength index(RSI) of Bitcoin is the first sign that the cryptocurrency’s macro bottom is likely to be revealed. It dropped below 30 on June 13. The Relative Strength Index (RSI) has entered the oversold region for the first time since December 2018. In the same month, Bitcoin ended its bear market rally and rose over 300%.
Bitcoin’s weekly chart showed that its weekly relative strength index dropped below 30 on March 9. It occurred as the price of Bitcoin had bottomed out at around $4,000 and then rallied to around $69,000 by November 2021.
Since June 18, the price of Bitcoin has recovered. It suggests that the cryptocurrency’s recent bear market rally may be over. It could also go on to repeat its previous parabolic rally.
Another sign of Bitcoin’s macro bottom is the net unrealized profit and loss(NUPL) indicator, which shows the difference between the market cap and the realized cap. It is a ratio, which means that investors are in profit if the value of the asset exceeds zero.
The number of investors who are involved in the market is also important. On July 21, Bitcoin NUPL rose above zero after the price of the cryptocurrency fell from around $22,000. This type of reversal usually follows up with major price rallies.
The third sign that Bitcoin is in a macro bottom is the Puell Multiple, which measures the profitability of mining. It looks at the impact of market prices on the profitability of miners. The indicator can be used to measure the daily coin issuance ratio and the 365 moving average of the market price. Notably, the Puelle Multiple is in the green box as of today, and it shows similar levels to those seen during the March 2020 crash, the 2015 crash, and the 2018 crash.
BTC Show Resistance At $23,000
The price of Bitcoin might continue to show some support at the $20,500 and $23K levels. Investors should pay close attention to the release of the GDP data on Thursday. According to estimates, the economy estimated growth was around 0.5%.
A negative sentiment reading on the gross domestic product of around 0.5% will give rise to a bear market in both the traditional and digital markets. It’s a sign that the economy is headed toward a recession.
If the price of Bitcoin doesn’t reach the $22,000 mark, it could fall to $19,000, the lowest level of the current trading range. It’s believed that Bitcoin is trying to maintain its selling pressure to keep its gains from June 18. This digital gold’s price had increased from around $20,700 to as high as $23,800.
Will Bitcoin Price Bottom Out?
Bitcoin is currently dangerously close to $19,000. However, can it bounce back quickly enough to avoid a huge drop? With a large amount of money getting into the market, a sudden drop to this level could cause a huge problem for the investors.
Various factors support the idea that the recent rise in BTC was a bear pit. It happened when the price breached the resistance and then reversed back.
After experiencing a 25% gain, Bitcoin might be bottoming out. The price has lost only a little bit since it hit $17,500 on June 18. It suggests that the bulls are still in charge. The weak relative strength index (RSI) on June 13 suggests that Bitcoin is in a bear pit. In March 2021, its index dropped to 20 and then rallied to $69,000.