Investors who believe in the price of BTC seem to believe that the $39,650 mark has marked the bottom, but a death cross on the daily chart suggests otherwise. So whether BTC will rise from here or will there be further declines, let’s analyze with Primexbt trading.
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After a day of rapid decline to the $39,600 region Bitcoin (BTC) price briefly rose above $43,100 in the US session but uncertainty remains the dominant sentiment among traders.
Data from TradingView shows that Bitcoin price has been trading closely around $42,000 as global financial markets embrace US Federal Reserve Chairman Jerome Powell’s statement on upcoming fiscal policy changes. . Powell indicated that the central bank is ready to “raise interest rates more over time” if inflation continues to linger at high levels, but analysts were quick to note further comments, suggesting that a low interest rate environment may persist for some time.
The $40,000 zone automatically becomes a strong support area for BTC. If it breaks through this level, BTC will tend to find its way back to the $29,000 region. Breaking through $ 45,500 will have a much better chance of moving to the $49,000 zone.
The rare Bullish signal in Bitcoin’s bullish history reappears.
A rare Bullish signal in Bitcoin’s bullish history has reappeared. It is an on-chain signal called Dormancy Flow (roughly translated as hibernation flow).
Please take a look at the following chart showing the volatility of Dormancy Flow and we will dive into the interpretation of this on-chain indicator to understand its message.
Observe the occurrences of buy signals of the Dormancy Flow onchain indicator. Throughout the history of Bitcoin price growth, Dormancy Flow has only shown buy signals exactly 5 times at the right major market bottoms. Since these bottoms, the Bitcoin price has always entered a strong bull cycle.
And in these early days of 2022, a buy signal from the onchain Dormancy FLow indicator appeared once again. This is arguably one of the best performing onchain signals ever. It appears very rarely, but when it does, it gives high reliability.
Why is a low Dormancy FLow a good buy signal? That’s because the meaning and construction of this indicator shows the following message.
Will Clemente is one of the twitter accounts that follow this indicator and it helped Will accurately predict the Bitcoin bottom in July 2021. To understand the meaning of Dormancy Flow (hibernating flow) you need to understand some of the following concepts:
The first is Bitcoin’s destruction days. The longer a Bitcoin stays in the wallet before the owner decides to spend it, the longer its destruction days. If you are a holder with a “diamond hand”, your BTC will have a very large number of days of destruction. It can be understood as the number of days of “hibernation” of that BTC.
Then divide this number of days by the corresponding total BTC. This ratio is called Dormancy. The higher the Dormancy, the more “old players” begin to participate in releasing their BTC into the market.
Not stopping, Dormancy Flow is taking the total market capitalization at the time of calculation divided by the total value of the amount of hibernated BTC (Dormancy multiplied by the BTC price of MA365). Then the lower the Dormancy Flow, the lower the market capitalization is (BTC price falling) while the market is left with only long-term holders who are distributing their BTC. And the new players were wiped out of BTC. This predicts a new uptrend.
That is why many on-chain analysts confident in the near-term BTC price increase remember the appearance of this signal.
DEATH CROSS Appears
Despite the January 11 spike to $43,100, many analysts remain pessimistic about Bitcoin’s short-term outlook and caution that a potential “death cross” on the daily chart was once an indicator. heavily discounted.
As shown below, the 50-day moving average is in close danger of falling below the 200-day moving average, a convergence that in the past has led to a sharp drop in price.
Bitcoin is approaching the “Death Cross”. The last time this happened in June, the price dropped another 20% in 31 days. That would take us down to $34,000 on Feb. 9 if history repeats itself.
The overall crypto market capitalization stands at $1.998 trillion and Bitcoin dominance is at 40.3%.
Nearly 30,000 BTC left major exchanges in just one day
Almost 30,000 BTC left major exchanges in just one day. After the most recent correction, in which BTC lost 15% of its value in a few days, bitcoin miners have started to accumulate big again. At the same time, January 11 saw the most significant bitcoin withdrawals from crypto exchanges since September. As the backbone of the Bitcoin network, miners’ behavior in relation to their BTC holdings they areis essential for the overall view of the property. Usually they tend to sell after the price has increased significantly to cover some of the electricity costs or simply to make a profit and vice versa.
Most recently, however, they kept all of their bitcoins. According to online data from Glassnode, the cryptocurrency’s latest price drop, which means the drop from $47,000 to under $40,000, has only spurred miners to increase their accumulation. Last week, separate data focused on what one analyst described as a “crazy” imbalance between bids and ask, suggesting that the bears are finally starting to get bored of selling.
So the miners holding on to BTC and the rare bullish signal that makes $39,600 really bottom this time around. Stay tuned to primexbt, we will update you soon.