Traders use various strategies. To determine if the Bitcoin price has reached the bottom or not. But online activities and derivatives suggest the situation remains unsafe.
Has the Bitcoin price reached its lowest point yet? According to @noshitcoins, futures contracts and data on the network can have additional disadvantages.
Traders have been trying to time the much-anticipated trend reversal ever since Bitcoin (BTC) started a 48% correction to $30,000 on May 12. The move resulted in a long position. $12 Billion Futures Liquidated and until now Trader’s sentiment remains somewhat damp.
The community began to look everywhere for signs of a trend reversal. including the technical model US CPI Inflation Data and Bitcoin exchange deposits. For example, some analysts say higher highs. Followed by a move above $40,000 is enough.
We need to create a new Higher High to confirm the lowest point in the area.
Recall 40k and we can start talking about a sustainable move back to 50k #Bitcoin pic.twitter.com/myeWXIYWpp
— immortal (@immortalcrypto) May 24, 2021
However, two days later, Bitcoin managed to break $40,000 even though the movement took no more than six hours. meanwhile other traders It assumes that it is necessary to test the $30,000 low again before the bounce occurs.
#Bitcoin $BTC #BTC is building a descending wedge here. It is bullish but there are two possible scenarios.
Green: break resistance and maintain an uptrend.
Red: Test the bottom of the wedge again (~30k) and bounce from there. pic.twitter.com/8L26kQvf7X
— Johnny Wu | Never DM you for money (@j0hnnyw00) May 25, 2021
Although there may be empirical evidence or even justification to support those statements. But market prices do not always respond to external news or previous charting. Unlike stocks, Bitcoin investors cannot rely on multiple valuations or even comparisons.
Of course, the digital value store is a single use case. But at the same time, it is undetectable and easily transferable. Additionally, some users value the peer-to-peer fiat conversion of Bitcoin outside of KYC-regulated exchanges. Another factor to consider. are investors who increase their Bitcoin portfolio due to their lack of correlation with traditional financial assets.
This panacea of diverse and sometimes controversial narratives creates obstacles for modeling market potential. adoption status and even measure the efficiency of the latest developments.
Some will cheer for Tesla and the big corporations building Bitcoin reserves, while others don’t care who owns less BTC, instead focusing on the challenges of scalability and interchangeability.
Tilt: A professional “fear and greed” indicator.
Call options allow buyers to receive Bitcoin at a fixed price when the contract expires. On the other hand, it provides an option to insure buyers and prevent price reductions.
Whenever market makers and professional traders are bullish They will want a higher premium (buy) option. This trend will cause the delta skew indicator to negative 25%. Conversely, if the downside hedge is more expensive The skew indicator will become positive.
25% skewed delta, which oscillates between negative 10% and positive 10%, is usually considered neutral. This balanced scenario lasted until May 16 as Bitcoin lost its vital support at $47,000, held for 76 days.
while the market deteriorated So does the 25% Delta skew indicator, and the cost of defensive options is rising as well. So until the indicator forms a more neutral pattern near the 5% level, it seems too soon to. call the lowest point of the market
Moving Bitcoin Supply Signals Weak Hands Need Cooling
Traders also monitor how much BTC has moved recently. This indicator cannot be considered bullish or bearish by itself. as it does not provide information about the age of the relevant address.
Prices have risen 500% since Oct. 1, 2020 and peaked at $64,900 on April 14, 2021, resulting in a significant increase in supply in the months leading up to the rally. When this indicator shows a sharp decline This indicates that investors are no longer interested in participating at the current price level.
There are currently 2.2 million BTC in use in the last 30 days, significantly higher than the level seen before October 2020.
At this time, traders should not hit Bitcoin until the market has no more relevant activity below $40,000.
The opinions and opinions expressed herein are the opinions of author and does not necessarily reflect the Cointelegraph Every investment and trading carries a risk. You should conduct your own research when making a decision.