When the Bitcoin price hits its bottom, here’s how you can take advantage of it
Bitcoin has been a disappointment to many in the crypto industry so far. The crypto king has had a pretty poor performance in terms of price action over the past 2 months.
But it’s time for Bitcoin to regain its glory.
Admittedly, there aren’t many signs of a major rally as of now, but there are some early signs of a recovery.
BTC/USDT | Source: Trade View
From a technical perspective, Bitcoin is recovering somewhat from the lows and breaking the 50-day moving average (MA) critical resistance. Even the RSI is showing good momentum at the time of writing. However, it is still trading below the 200-day MA. This implies that the long-term uptrend has not returned to the market.
To eliminate all restraining bears, the price needs to break above both the 200 DMA and the second resistance area at $52,000-54,000.
On-chain indicators also seem positive for bitcoin as the NVT ratio remains intact despite the recent days price rally. This represents a bullish buying opportunity in a situation where BTC is undervalued. At the same time, the coin can generate good returns if general market sentiment recovers in the future.
NVT Rate | Source: Santiment
In addition to the NVT Ratio, the corrected DAA price divergence is also sending buy signals everywhere. Therefore create a good buying opportunity.
Deviations DAA-Price adjusted | Source: Santiment
The Puell Multiple of Bitcoin is also currently pointing to an attractive value proposition. The ratio is still below 1 even though the price has recovered from local lows. This mainly represents a good risk-on-reward scenario.
Drag multiple | Source: Glassnode
However, it seems unwise to buy Bitcoin now. Oddly enough, there are a few worrying signals to watch out for. Bitcoin options data review by Coinoptionstrackit is quite clear to see that a price drop is imminent.
Bitcoin options chain | Source: Coinoptions track
At the time of writing, Bitcoin is trading around $42,432. The chart above clearly shows the maximum drop around $41,000. Therefore, the potential drop will not be too deep. Also, long contracts are heavily concentrated at $40,000 and $42,000, well below the maximum decline.
Accordingly, there are 2 possible cases. If the professional options trader bets a lot of money, the price can drop to $40,000. Conversely, if they post a loss and liquidate their positions, the short will push the price higher. Open interest at $43,000 may support bullish traders at this time. This suggests that a near-term bearish bias is possible but does not affect the overall structure and sentiment.
Interestingly, from an investor perspective, there may be a good BTC buying opportunity. However, in this case it is advisable to be partial when placing a buy order, as the possibility of a fall cannot be completely ruled out. Buying dip will be the best way in the future.
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Analysis
When the Bitcoin price hits its bottom, here’s how you can take advantage of it
Bitcoin has been a disappointment to many in the crypto industry so far. The crypto king has had a pretty poor performance in terms of price action over the past 2 months.
But it’s time for Bitcoin to regain its glory.
Admittedly, there aren’t many signs of a major rally as of now, but there are some early signs of a recovery.
BTC/USDT | Source: Trade View
From a technical perspective, Bitcoin is recovering somewhat from the lows and breaking the 50-day moving average (MA) critical resistance. Even the RSI is showing good momentum at the time of writing. However, it is still trading below the 200-day MA. This implies that the long-term uptrend has not returned to the market.
To eliminate all restraining bears, the price needs to break above both the 200 DMA and the second resistance area at $52,000-54,000.
On-chain indicators also seem positive for bitcoin as the NVT ratio remains intact despite the recent days price rally. This represents a bullish buying opportunity in a situation where BTC is undervalued. At the same time, the coin can generate good returns if general market sentiment recovers in the future.
NVT Rate | Source: Santiment
In addition to the NVT Ratio, the corrected DAA price divergence is also sending buy signals everywhere. Therefore create a good buying opportunity.
Deviations DAA-Price adjusted | Source: Santiment
The Puell Multiple of Bitcoin is also currently pointing to an attractive value proposition. The ratio is still below 1 even though the price has recovered from local lows. This mainly represents a good risk-on-reward scenario.
Drag multiple | Source: Glassnode
However, it seems unwise to buy Bitcoin now. Oddly enough, there are a few worrying signals to watch out for. Bitcoin options data review by Coinoptionstrackit is quite clear to see that a price drop is imminent.
Bitcoin options chain | Source: Coinoptions track
At the time of writing, Bitcoin is trading around $42,432. The chart above clearly shows the maximum drop around $41,000. Therefore, the potential drop will not be too deep. Also, long contracts are heavily concentrated at $40,000 and $42,000, well below the maximum decline.
Accordingly, there are 2 possible cases. If the professional options trader bets a lot of money, the price can drop to $40,000. Conversely, if they post a loss and liquidate their positions, the short will push the price higher. Open interest at $43,000 may support bullish traders at this time. This suggests that a near-term bearish bias is possible but does not affect the overall structure and sentiment.
Interestingly, from an investor perspective, there may be a good BTC buying opportunity. However, in this case it is advisable to be partial when placing a buy order, as the possibility of a fall cannot be completely ruled out. Buying dip will be the best way in the future.
Join CoinCu Telegram to keep track of news:Â https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
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