Solving this now will define a long term profit margin for Bitcoin
After the November 4th hourly candle collapsed, Bitcoin tested nearly $ 60,000 again. The price has fallen to as low as $ 60,050 with the underlying structure easing in the short term. At the time of writing, Bitcoin has bounced back and is currently trading at $ 62,328.
BTC 1 Hour Price Chart | Source: Tradingview
However, there is also an opinion that the selling pressure from the owners is now easing and Bitcoin will soon regain strength in the charts.
On the other hand, it is the current market retreat that is making investors and traders wonder about the best entry point. So the article will try to analyze how to trade Bitcoin in the current market context.
Review of the on-chain indicators
BTC price (green) and MVRV price (pink) | The source: Twitter
Right now, Bitcoin’s market-to-real-value ratio (MVRV) can be extremely worthy of analysis.
According to Santiment, BTC’s 30-day MVRV fell to a low last seen on September 30 over a month ago. MVRV is the metric needed to create buy or sell orders and a lower value usually indicates a buy signal.
However, if you look closely at the chart, the 30-day MVRV will typically keep falling before reversing. Also, it is said that investing in the first negative area is not an ideal situation.
BTC put / call rate | The source: Crookedness
A similar bearish reversal occurred in the futures market. After a steady decline in the value of the put / call ratio, it has been starting to rise since the beginning of last week, indicating an increase in put contracts.
So Bitcoin price could prolong the correction and the recent drop in the OPI suggests the same thing. In fact, open interest often falls during bear markets because BTC options traders tend to be bullish rather than bearish.
Total open interest in BTC options | The source: Crookedness
Bitcoin Market Sentiment: Investors and Traders
The source: Trade view
From a spot investing perspective, $ 60,000 is a good buy range, but there is a high chance that BTC will drop to $ 56,500 in the short term. Since Bitcoin invalidates a bullish head and shoulders pattern, a decline below USD 60,000 cannot be ruled out.
However, $ 60,000 is a strong level of support. It is best to set 50% of the investment decision capital at $ 60,000 and the remaining 50% at $ 56,500.
It is safest for merchants to avoid listings near the $ 60,000 mark. Any leveraged trade in this market, long or short, is a high risk strategy that offers high profits.
In the event the $ 60,000 price bounces off, leveraged traders should wait for a positive close above $ 64,000 before entering a long position. If Bitcoin drops below $ 60,000, a long position near $ 56,500 will likely generate a profit.
Rest assured, unless it falls below $ 53,000 at breakneck speed, Bitcoin will remain bullish for the long term. However, it is important to choose the right short term entry points that will determine how much profit can be made over the long term.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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