Is market turmoil signaling that Bitcoin is on the verge of bottoming out?

In the past week, Bitcoin managed to soar above $ 50,000. However, all efforts seem in vain. The price action is capped at $ 49,000 so far and $ 47,900 is lower short-term support.

Currently, Bitcoin’s trajectory shows chaos and turmoil in this market.

At press time, BTC is trading at $ 49,668, up nearly 3% on the 4-hour chart. However, before we can analyze the short to medium term price history, we need to look at the events of the past week.

BTC price 4-hour chart | Source: Tradingview

Confusing indicators

In the past week, when many were expecting the crypto king to recover, network activity spiked significantly.

However, at the time of analysis, Bitcoin is down almost 3% in the number of new transactions and addresses compared to the previous week. In contrast, the number of active addresses rose by almost 4% and the active offer by almost 5%.

Number of active BTC addresses | Source: Glassnode

The above trends imply increased network demand due to existing market participants and not due to new players.

When BTC’s capitalization fell nearly 1% to less than $ 1 trillion, its hash rate fell slightly by 0.1%. The network saw hash performance increased 16% to a near-record level of 181.77 EH / s. Bitcoin’s next difficulty adjustment is scheduled for December 12th and is expected to increase by 7.8%.

On the flip side, the number of BTC wallets with more than 1,000 bitcoins a week is down 1.36%, which may indicate profit-taking by big players.

With price action appearing to be stagnating, it seems to be signaling that market participants are panicking.

Bitcoin price reached?

Bitcoin trader sentiment has slipped into bearish territory in recent days as people have become increasingly skeptical that the price won’t return to mid-November levels.

Historically, however, the negative sentiment was an early sign that BTC had bottomed out. So could the $ 48,000 range be the bottom of this cycle?

BTC Weight Psychology (purple) | Source: Sanbase

First of all, when analyzing Open Interest (OI) and Funding Rate, the Funding Rate is negative, but close to zero at the time of writing.

Open interest and funding rates for Bitcoin futures are negative on several major exchanges. In general, after such a negative change, we can see the price increase.

Source: CryptoQuant

It is also worth pointing out at this point that the converted stablecoin index hit ATH, meaning whales are taking profits in response to the FOMC announcement in December before the market moves.

The source: KryptoQuant

Going forward, it looks like BTC will continue to be volatile due to the broader market momentum. For now, however, the price has to stay above $ 50,000 before it can recover.

Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews

Follow the Youtube Channel | Subscribe to telegram channel | Follow Facebook page