Is Bitcoin Going to Start Booming? This Signal Indicates Strength
The path of least resistance in the short term is to the north, as despite the weakness, the price is still within the bullish engulfing bar of the 13th of September.
After an encouraging expansion in the second half of last week, bitcoin remains flat at the end of the year, falling below $60,000. As prices pull back, the world’s most valuable currency is showing signs of strength and a possible bottom, according to blockchain data.
Regarding X, one analyst, citing CryptoQuant chain data, notes that the Mayer multiple, a market sentiment gauge, is falling. In particular, the analyst notes that the value of the Mayer multiple has dropped from 1.82 to 0.9.
Although it is down, it should continue to fall. According to the dealer, when sentiment drops and the reading falls to 0.7, it could indicate that the market has bottomed. This bottom could be anywhere from $46,000 to $50,000 depending on the price action.
Has Bitcoin Hit Rock Bottom?
It should be noted that the Mayer multiple is a lagging indicator. However, it is useful. It is calculated by taking the spot price of BTC and dividing it by the 200 day moving average. When the value is below 1, it is an indication of possible undervaluation, which is the case today.
Technically, according to the formation on the daily chart, bitcoin’s bullish trend is holding. Prices remain within the September 13 bull bar, even though the currency is trending below $60,000. From an effort versus outcome point of view, this is a net positive for the buyers now that the decline is taking place evenly and with lighter trading volume.
If BTC holds above the $56,500 level, buyers will still have a chance. There will be better opportunities on a rally and a close above last week’s highs of around $61,000.
Futures Market Tips
The analyst is optimistic and expects the currency to find support in addition to the Mayer multiple and hopes for a bottom. The Bitcoin Futures market is showing signs of strengthening. The Bitcoin Futures Sentiment Index is now rising, according to CryptoQuant data. Historically, when the index rises, prices tend to follow and move higher simultaneously.
As optimistic as this scenario seems, bulls should push prices up, ideally by breaking above immediate local resistance. According to the analyst, a decent, high-volume close above $69,500 could trigger a fear of missing out (FOMO) in the market, which would push the currency to new heights.
Why Is the Fourth Quarter Important for Bitcoin?
It is clear from an analysis of bitcoin’s quarterly return trend that the fourth quarter has always been a favorable period for bitcoin. Since 2011, there have only been five times when the market has shown a negative return, compared to eight times in the third quarter. Last fourth quarter, the market returned +56.6%.
It is noteworthy that in 2020, the market showed a massive return of +169.7%, which is the highest return since 2018. In its release, the expert Ether Nasyonal highlights the importance of the fourth quarter of the year. It is clearly anticipating the mega bull run that is expected to occur in this fourth quarter.
What Ether Nasyonal wants to convey by publishing X is hope. Interestingly, their hope is supported by a historical trend related to the behavior of the market cycle. All eyes are on the bitcoin market.
By Leonardo Perez