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The Bitcoin chart reproduces the end of the previous bear market.
The main cryptocurrency faced such strong resistance at the $21K level that some traders began to see a double top on the chart, indicating the coming new lows.
BTC/USD chart according to the eight largest cryptocurrency spot exchanges. Source: Cryptovizor
Like in 2018
The opposite point of view is shared by the popular Twitter analyst Stockmoney Lizards, who drew attention to the opposite pattern – a double bottom. He went even further and found that the 2020-22 Bitcoin chart is similar to the 2017-20 chart. Then the asset lost the seemingly impenetrable support at the level of $6,100, collapsed by 50%, formed a double bottom and moved to growth. Now the support at $30,000 acted as the same “reinforced concrete level”, the breakdown of which led to a 40% price collapse and the formation of a similar double bottom pattern.
Comparison of 1-day bitcoin charts. Source: Stockmoney Lizards
But analytics is not alive by a single schedule.
Traders actively use the NVT (Network Value to Transaction ratio) proposed by Willy Woo. It is calculated by dividing the market capitalization of bitcoin by the volume of its transactions (in US dollars) and allows you to estimate the profit of the holders of the asset. The lower the value of this coefficient, the further the market is from the bubble.
The moving average generates an NVT signal, which may indicate that bitcoin is overbought or oversold.
It was from this signal that the bullish mood of Stockmoney Lizards received support. Trader El Crypto Prof tweeted:
The NVT signal is now predicting a significant move for Bitcoin. Over the past three years, when the NVT signal (red-green line) crossed the NVT coefficient (black line) upwards, the price of bitcoin grew by an average of 450%. I think very soon we will see a big green candle.
Bitcoin 1-month chart and NVT signal. Source: El Crypto Prof
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