Bitcoin [BTC]: Is this really the right dip to cash in on
Bitcoin, again, went on a steep downtrend on 18 August after seeing steady uptick following its massive decline in June. In fact, for a brief while, the king coin also managed to cross the $24,000-mark, which gave hope to investors for a further surge before moving south.
At the time of writing, BTC was trading at $21,119.65 with a market capitalization of $403,966,011,914. However, before panic selling, investors might look at some metrics. Especially since some data sets might suggest this is a good time to accumulate BTC.
What does the data tell us?
A look at the Hash Ribbon’s data suggested that there may be a great buying opportunity for buyers as the 30-day MA crossed the 60-day MA. When the 30d MA passes over the 60d MA, the Hash Ribbon signals that the worst of the miners’ surrender is over. This is a positive market indicator, one encouraging investors to buy more.
The crossover in question began last week after the green line gained enough momentum to overtake the blue line.
This is the current scenario
Ghoddusifar, a CryptoQuant analyst, recently expanded on the possibility of BTC falling by a further 30%. In light of what the Hash Ribbon tells us, it’s worth looking at some metrics to assess whether the prediction can be true.
Consider this – Bitcoin depreciated by 15% over the last seven days. On the contrary, a massive spike in volume was noted, indicating liquidations. The Total Transfer Volume to Exchanges of Bitcoin also fell along with the price, further underlining the operation of a bearish market.
The total supply in loss also moved north as it hiked from 6,825,471 on 15 August to nearly 8,720,069, marking this month’s highest on 19 August.
Finally, BTC’s 4-hour chart too flashed a similar picture as the Exponential Moving Average (EMA) Ribbon pointed to a bearish upper hand in the market. The 55-day EMA was well above the 20-day EMA – Something that suggested a further decline in BTC’s price over the coming days.
All these datasets complement Ghoddusifar’s assessment of a further drop in price. Therefore, investors should think twice before making a sell call as the metrics do seem to suggest a good buying market.
Worth pointing out, however, that while most data points indicated a bear market, a closer look at some indicators implied the opposite. A bullish crossover happened on the MACD and that might lead to a price uptick in the next few days.
Moreover, the RSI also highlighted some bullish movement as it bounced back from the oversold zone and was moving towards the neutral zone.