- BTC’s outstanding interest fell sharply as the price plummeted.
- The Fear & Greed index revealed that the market was in a ‘fear’ phase.
Bitcoins [BTC] the price fell below the $26,000 mark again, sparking fear among investors. The king of cryptos has been hesitant for months to turn its price action bullish as it failed to cross $30,000. However, if history repeats itself, BTC will soon enter a bull market.
Read Bitcoins [BTC] Price prediction 2023-24
This possibility seemed likely as a major metric showed a similar pattern to 2019, after which the price of BTC skyrocketed. Not only that, but other indicators also gave the idea that Bitcoin could see a rally in the near term.
Bitcoin to Dump the Bears?
James V. Straten, a crypto analyst, pointed out that Bitcoin was trading below its cost base for short-term holders at $28,680 for the third consecutive day. A similar pattern was also noticed in 2019, when BTC exited the bottom of the bear market. Therefore, this gave hope that BTC could witness a bull rally in the coming months.
Currently, #Bitcoin is trading below the STH cost base ($28,680) for the third consecutive day. In June, it traded below for 10 days.
A similar pattern emerged in 2019 as we exited the bottom of the bear market. #Bitcoin went from $12,500 to $6,500 trading under STH… pic.twitter.com/rJALsR4BqK
— James V. Streets (@jimmyvs24) August 20, 2023
A look at Bitcoin’s derivatives market also suggested that the coin’s price could rise. For example, when the price of BTC plummeted, so did the outstanding interest. A drop in the metric generally results in a trend reversal.
Source: Coinglass
These stats support an upward trend
Another positive development was highlighted by the Glassnode Alerts tweet. The tweet mentioned that BTC’s aSOPR (7d MA) just hit a 5-month low of 0.99251. This indicated that more investors were selling at a loss.
When such episodes occur, they generally indicate a possible market bottom, increasing the likelihood of a price increase in the coming days.
📉 #Bitcoin $BTC aSOPR (7d MA) just hit a 5-month low of 0.99251
The previous 5-month low of 0.99283 was observed on June 16, 2023
View statistics:https://t.co/yJqatjFTgP pic.twitter.com/9NK1WlKrsD
— glassnode alerts (@glassnodealerts) August 21, 2023
A few other stats also looked optimistic BTC. For example, the currency’s exchange reserve declined, suggesting it was not under selling pressure. Miners also seemed confident Bitcoin, as the miners’ position index (MPI) was green, meaning they sold fewer positions compared to the yearly average.
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Like miners, long-term holders’ movements have been lower than average over the past seven days, reflecting their confidence in Bitcoin. Additionally, at the time of writing, Bitcoin’s Fear & Greed Index had a value of 38, indicating that the market was in a “fear” phase, which is generally followed by an increase in the value of the asset.
At the time of writing, BTC was trade at $25,953.27 with a market cap of over $505 billion.
Source: CryptoQuant