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December 7, 2019
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Since Bitcoin (BTC) tapped $6,500 in late-November, analysts have been wondering if the bottom is really in. You see, the leading cryptocurrency bounced by 20% from $6,500, hitting $7,850 just a week back.
Related Reading: Eat My Shorts: Everything You Need To Know About The Bitcoin Bart Pattern
While some say that the fact that Bitcoin failed to crack the key resistance near $8,000 is decisively bearish, analytics companies in the industry are starting to believe that a bottom is forming.
Bitcoin May Soon Bounce
On-chain market intelligence firm Glassnode recently observed that there is a confluence of factors suggesting that the Bitcoin bottom is forming, if not here already.
They first noted that the Market Value to Realized Value (MVRV), the ratio between market cap and realized cap, is “consolidating towards one,” which implies that gains are being realized by Bitcoin investors. A one reading of the ratio often marks a bottom for the cryptocurrency market.
1/ Weekly on–chain market observations:
The bottom is close – and once it happens, the reversal will be strong.
MVRV is consolidating towards 1, which historically has indicated the bottom of #Bitcoin market cycles. Patience is key.https://t.co/lv8knFD0wV pic.twitter.com/7kwckER6Ri
— glassnode (@glassnode) December 7, 2019
There’s also Unrealized Profit, which “paints a very similar picture.” “As investors have less profit to realize, $btc sell pressure starts to diminish allowing for upwards momentum to build,” the firm wrote noting the importance of the metrics.
It isn’t clear if Glassnode’s analytics implies that Bitcoin will range in the low-$7,000s for a while, or if the cryptocurrency will see one flash move lower. Though, whatever the case, the “bottom is close—and once it happens, the reversal will be strong.”
The “strong reversal” narrative being pushed by the analytics startup is consistent with other analyses.
As reported by NewsBTC just days ago, the opening month was harrowing for Bitcoin (BTC) for one reason: the open of the December candle for the cryptocurrency’s price triggered a “sell” signal on the Market God v7 indicator.
Related Reading: Bitcoin CME Futures Gaps Are Filled With 95% Certainty, But Trading Them Is Risky
This was seen as bearish, as the last time the indicator gave the signal was in April, which was prior to the move that took the price of Bitcoin from five digits to $3,150, before printing a buy signal near the bottom.
Though, according to Thies’ latest check of the indicator, the “sell” signal has dissipated as bears have failed to continue to push lower the price of Bitcoin.
Bottom Pattern Forms
That’s not to mention that a bottoming pattern is forming on Bitcoin’s chart. Popular cryptocurrency analyst Jonny Moe noted that BTC’s chart is currently building a bottoming pattern, which could show that its downtrend formed after the pump to $10,500 is over:
“The BTC inverse head & shoulders we saw last week has turned into an Adam on a potential Adam & Eve bottom. You could interpret the Eve as the beginning of a cup & handle continuation as well. Both of these are still just potential, but certainly there.”
The $BTC inverse head & shoulders we saw last week has turned into an Adam on a potential Adam & Eve bottom.
You could interpret the Eve as the beginning of a cup & handle continuation as well.
Both of these are still just potential, but certainly there. pic.twitter.com/8GzTvFT6BN
— Jonny Moe (@JonnyMoeTrades) December 7, 2019
Featured Image from Shutterstock
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