Now, it is a better moment for those trusting in the long term to buy Bitcoin than when it was worth around USD 50,000. The price would resume the bullish trend if it strongly breaks through the descending line on the monthly chart.
Although a dominant short-term bearish direction continues to affect Bitcoin (BTC), several metrics have shown positive signs over the last week.
According to on-chain data analytics platform CryptoQuant, indicators tracking supply and demand have continued to give bullish signals. The reserves on exchanges have remained neutral in an area of lows not seen for three years. In the case of the Bitcoin whales, metrics have also been positive this week.
However, technical oscillators and market sentiment have been predominantly bearish for BTC following the short-term tide. The futures market is still overheating, with a leverage ratio close to its all-time high.
BTC is trading at around USD 30,635 and has accumulated a 4.5% gain over the last 24 hours. While its daily trading volume is above USD 26 billion, its market capitalization is about USD 583.89 billion, according to CoinGecko.
RSI Indicates that the Bottom of the Bitcoin Price Is Close
The Bitcoin historical Relative Strength Index (RSI) modeled by analyst PlanB Renowned analyst PlanB shows the price in an oversold zone. It has only reached that level at bearish market bottoms like those in 2020, 2018, and 2015.
The current moment is undoubtedly a better opportunity to buy than when the value of BTC was around USD 50,000. Those trusting in the long term could see the current price as a great opportunity.
However, it is impossible to confirm that the value of Bitcoin has already reached the bottom. RSI reveals that there have continuously been lower lows with each bearish cycle as the historical volatility reduces. For that reason, it might still be necessary to see more blood before thinking that the price has reached its lowest point.
Prediction of the Bitcoin Price Based on the Weekly Technical Analysis
The review of the daily chart shows that the price of Bitcoin remains locked in a sideways range, slightly tilted toward the downside.
Given that the previous trend is bearish, there will likely be more selling in the short term. If the upcoming support level at USD 26,281 stays close, the next one to visit is USD 22,719.
That would change if the value of BTC strongly breaks through the descending line on the monthly chart. That scenario would indicate a significant respite in the price, but it would be irrelevant if it does not exceed USD 40,000.
Besides a significant support level, a divergence in the RSI allows the bullish scenario to have part of the odds in its favor. It is just a matter of time for the price of BTC to increase until generating profits for its investors.
Since its beginning, Bitcoin has proven able to recover from the worst crises to resume its previous all-time highs. Besides, renowned analysts have recommended buying the cryptocurrency when its price has dropped and waiting until it increases.
By Alexander Salazar
