Bitcoin has once again dipped below the $20,000 significant level which has acted as a strong support level in the previous months. Along with Bitcoin, the majority of the altcoins have also slipped with Ethereum decreasing by about seven percent in the last 24 hours.
A crypto analyst is trying to ascertain whether the most valuable cryptocurrency, Bitcoin (BTC), has reached a bottom by constantly monitoring its price movement. After BTC fell from its all-time high of $69,000 to below $20,000, John Bollinger, the technical analyst who developed the Bollinger Bands tool tells that Bitcoin may actually be in a position to put in a macro bottom.
“Picture perfect double (M-type) top in BTC/USD on the monthly chart complete with confirmation by BandWidth and %b leads to a tag of the lower Bollinger Band. No sign of one yet, but this would be a logical place to put in a bottom.”
Bollinger bands are used by traders to forecast the next erratic movement of an asset, but they may also point to potential areas of reversal. Trading participants consider the upper band as resistance and the bottom band as support.
Bollinger emphasizes that BTC has managed to maintain above the lower band on the monthly chart in the case of Bitcoin, indicating that Bitcoin may have found a bottom at the present price.
Are Bitcoin Traders on a Vacation?
Leading analytics company Santiment has said that it is finding favorable on-chain indications for BTC, which is in line with Bollinger’s analysis. Santiment claims that this month’s increase in interest in Bitcoin shows that traders are taking a vacation from their intense altcoin speculation.
Bitcoin is seeing increased discussion in the latter half of June after the majority of altcoins have dropped 80% or more from their November market cap values. Historically, declining interests in inorganic alt pumps are a positive sign for crypto.
Additionally, Santiment claims that traders gave priority to shorting altcoins when the cryptocurrency markets declined over the weekend. Trading activity on Sunday revealed that, despite their claims to be buying the dip, dealers were actually shorting more on these minor decreases. It’s interesting that this only applies to cryptocurrencies at the moment, showing that people are turning to Bitcoin as the safe haven.
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Source: https://coinpedia.org/bitcoin/when-will-bitcoin-bottom-out/