Bitcoin has recovered from its recent low of USD 17,600, but it is impossible to consider it a healthy pullback. Most on-chain indicators tracking basic network activity, miner behavior, and unrealized losses point to the proximity of the bottom.
Although the fear sentiment still predominates, calm has already returned to the crypto market. Since a Bitcoin rally is underway, the forecast indicates some more gains in the short term.
BTC is trading at around USD 20,920 and has accumulated a 2.0% gain over the last seven days. While its daily trading volume is above USD 18.51 billion, its market capitalization is about USD 399.14 billion, according to CoinGecko.
Many experts predict that Bitcoin currently has an undervalued price, which various on-chain metrics confirm.
The CEO of Binance, Changpeng Zhao, thinks that the worst is over, adding to the vision of maximalists like Michael Saylor and Max Keiser.
Everything seems to point to the same place, but it is still impossible to confirm that the bulls have regained control.
The Bitcoin Price Could Rise by 30% in the Short Term
As expected last week, the Bitcoin bulls have defended the large support zone around USD 18,000.
The price of the pioneering cryptocurrency is now seeing a healthy and necessary pullback.
It has recovered from its recent low of USD 17,600 by around 20%; an already quite significant percentage.
However, it is still impossible to consider the recent rally a healthy pullback. Prices usually retrace as low as 38.20% Fibonacci before continuing the trend, currently in the resistance zone around USD 30,000.
There are signs that the price has already bottomed out, so the long-term trend is imminently bullish. Even though the short/medium-term direction might return to the bulls, it is early to confirm that.
What Should Happen to Confirm the Control of the Bulls?
There is not still enough buying volume to confirm a broader rally, but it could happen soon.
Bitcoin has been building an inverted Head-and-Shoulders pattern above the support zone of around USD 18,000. That scenario indicates that there has been a change in the trend.
Before confirming that, there should be a rebound in the buying volume in the coming hours. I should move the price away from the descending line marking the Head-and-Shoulders pattern.
Conservative analysts would expect the price to break resistance at USD 22,680.
The bears could take the price back toward around USD 20,000 before a significant rally develops if that does not happen soon.
On-Chain Indicators Show that Bitcoin Has an Undervalued Price
According to the weekly CryptoQuant metrics overview, most on-chain indicators show bullish signals.
All indicators tracking basic network activity, cyclical indicators, miner behavior, and unrealized losses point to an imminent bottom.
There is a reduction in miner profits as mining difficulty remains high while the price drops, a scenario usually heralding a capitulation.
The market has a significant unrealized loss, seen in the NUPL, MVRV Ratio, SOPR Ratio, and Puell Multiple metrics.
It is not the best time to accumulate, but it is at least a good one. Various analysts consider it is hard to try to stop the absolute bottom of the price.
By Alexander Salazar
