Bitcoin To See More Downtrend in Coming Days, BTC Price could See Reversal At This level

Analysts have analyzed Bitcoin’s indications and determined that BTC had reached a bottom. Based on the data, experts believe Bitcoin will recover its losses and reach a target of $40,000 in the coming months.

The price of bitcoin fell below $30,000 once more as investor sentiment turned optimistic. The asset has been struggling to recover and recoup losses from the previous four weeks. A top crypto analyst, Benjamin Cowen, has uncovered three crucial signs that can help predict when Bitcoin will bottom.

The Bitcoin one-year running ROI, computed as a profit multiple on holding BTC for a year, is one indicator used to identify Bitcoin pullbacks and predict the occurrence of a cycle bottom.

The one-year running ROI dropping below 0.4 or 0.3 indicates the asset is approaching a market cycle bottom. The current value of Bitcoin’s one-year ROI is 0.647, indicating that the asset has not yet reached the bottom and is unlikely to do so until May 2022.

The percentage of supply in profit and loss is another indicator of a market cycle bottom for Bitcoin. On the graph, two separate lines depict the two percentages. When the percentage of supply in profit exceeds the percentage of supply in loss, Bitcoin has reached a market cycle bottom.

The pattern has been seen in the last two Bitcoin cycles, according to analysts. Although this event has yet to occur, the two lines are heading in the same direction. As a result, a Bitcoin bottom could be weeks or months away.

What do Indicators Say?

The Puell Multiple is a measure used to estimate the extent of sell pressure on Bitcoin from miners. It is computed by dividing the daily issuance value of Bitcoin by the 365-Day Moving Average. Miners have traditionally sold Bitcoin to fund their running costs, and their revenue comes from block subsidies. With the fluctuation in Bitcoin values, the USD value of block subsidies fluctuates virtually every day.

A market cycle bottom is often indicated by a decline in the Puell Multiple to 0.4 or lower, according to Benjamin Cowen. The BTC Puell Multiple is currently above 0.59, indicating that we are approaching but not quite at the bottom; as a result, the asset’s price could fall even further to below $25,000.

Three leading signs suggest that Bitcoin’s bottom has yet to be reached. As a result, Bitcoin’s price may fall lower in the current market cycle before hitting the bottom.

Was this writing helpful?

Source: https://coinpedia.org/bitcoin/bitcoin-to-see-more-downtrend-in-coming-days/