Three Indicators that Bitcoin Hit Bottom at $49,000, and other News
Bitcoin is currently trading within a broad descending wedge, testing the $54,000 lower border for support. Recently, healthcare technology company. Semler Scientific purchased approximately $6 million worth of bitcoin. In a notable change of tone regarding El Salvador’s bitcoin strategy, the International Monetary Fund (IMF) announced progress in negotiations.
Bitcoin’s drop to an intraday low of $48,974 on Monday led many to believe that the only direction from here would be up, and that may be the case. Two leading indicators, the first of which is the NVT signal, are currently signaling a bottom.
The Network Value to Transaction (NVT) signal is used to assess the relationship between a cryptocurrency’s market capitalization and the volume of transactions on its network. This indicator differs slightly from the NVT ratio in that it measures market capitalization against the 90-day moving average of daily transaction volume.
Another important signal is the Bitcoin Bull-Bear Market Cycle indicator, which does not signal an explicit bottom. As the name suggests, the indicator is used to assess the momentum building in the market.
The bitcoin price is the third leading indicator to signal a bottom, as BTC closed above the lower trendline of the broad falling wedge pattern at $54,000. This pattern has been consistently validated since early March and suggests a 21% upside after a break above $70,000.
While the intraday low is at $48,974, the rally shows that BTC has bottomed and is rallying back to the $54,000 level. However, this pattern also needs to be successful and if the optimism fails, consolidation within the pattern could continue.
Semler Scientific Purchased Bitcoin for Approximately $6 Million
The acquisition is in line with its plan to move some of its reserves into the top cryptocurrency. This is a strategy that MicroStrategy has successfully implemented.
The healthcare company confirmed that it was preparing a new BTC purchase at the end of July last year. The firm said in its quarterly earnings statement released this Monday that it recently went into effect.
The company started buying Bitcoins in May, having purchased 581 coins. Last June 7, the company acquired another 247 BTC for its balance sheet. They added another 49 bitcoins at the end of the same month. With the latest purchase of 101 tokens, the company’s holdings reach 978 BTC.
In doing so, the company seems to be determined to go down a similar path as MicroStrategy. There is also another company on the other side of the world that is active in this strategy as well. It is the Japanese company Metaplanet. For several months now, it has also been making regular purchases of BTC.
IMF Softens Its Stance on El Salvador’s Bitcoin Strategy
In a significant step for the Spanish-speaking country, the IMF acknowledged that the risks associated with the pioneering cryptocurrency have not yet materialized.
The BTC-based project was launched by the Salvadoran government under President Nayib Bukele in 2021. Since then, there has been a deterioration in relations with international financial organizations such as the World Bank and the IMF itself. Tensions have been evident in several communiqués from these organizations and in Bukele’s public statements.
Nevertheless, negotiations between the two parties seem to be moving toward normalization. This is reflected in the more conciliatory tone of recent IMF statements on the country. The IMF acknowledges that there is progress on a preliminary agreement with the Salvadoran government, according to a Bloomberg report.
By Audy Castaneda