- Increasing calls to sell BTC could trigger a recovery to $68,600
- A key metric revealed that the coin has not yet reached the peak of this cycle
In an interesting turn of events, Bitcoin’s [BTC] The drop below $63,400 has fueled a lot of fear, uncertainty and doubt [FUD] on the market. This claim can be supported by looking at traders’ sentiment over the past 12-24 hours.
Using Santiment’s social tool, AMBCrypto noticed that the calls to sell were much more than the “buy the dip” shouts. A few weeks ago that was not the case. This is because every small dip in the cryptocurrency’s price around that time caused a wave of bullish calls.
Is fear the source of strength for a walk?
However, this situation is not entirely bad for Bitcoin as a spike in FUD could cause an uptick in the charts. In fact, something similar happened recently on April 21st.
On that day, BTC depreciated and fell to $64,531, with many traders believing that a further decline was imminent. However, contrary to these expectations, Bitcoin rose and reached $67,169.
Source: Santiment
If that’s in place, it’s possible to see a repeat of that situation if the bears continue to share their sentiment publicly. However, it is also important to look at the possibility from a metric driven PoV.
To start, AMBCrypto looked at the Market Value to Realized Value (MVRV) Z-score. For the uninitiated, the MVRV Z-score can detect the bottoms and tops of a cryptocurrency. It can also determine whether an asset is overvalued or undervalued.
At the time of writing, Bitcoin’s MVRV Z-score was 2.32. If we look at the diagram below, we can do that to see that the price has recovered every time the value fell below 2.60 since March.
Source: Santiment
However, there is a chance that BTC falls below $62,400 if the bears maintain control over the price. If that’s the case, the rebound could be better, and a rise to $68,600 could be next.
BTC looks good for the last part
Another metric that AMBCrypto evaluated was the Pi Cycle Top indicator. Historically, this benchmark has been instrumental in identifying when BTC is overheated or otherwise. On the indicator you will find two lines: a green and a purple. The green line represents the 111-day Simple Moving Average (SMA), while the purple line represents the 350-day MA.
In most cases, Bitcoin comes out on top when the 111SMA reaches the same spot or rises above the 350SMA. However, at the time of writing, this was not the case, as the green line remained below the purple line.
Source: Glassnode
Read Bitcoin’s [BTC] Price forecast 2024-2025
The state of this metric seemed great for Bitcoin bulls, not just for the short term. but for most of this cycle.
Should the Pi Cycle Top maintain its position in the coming months, BTC could rise. And a target of $80,000 to $85,000 could also be possible.