Is Now The Perfect Time To Buy?

As Bitcoin price valuation inches closer to the $65,000 mark, the asset has grabbed the attention of market analysts, with one recently highlighting a key indicator that now suggests a potential further recovery in BTC’s price.

Particularly, according to a recent post on the CryptoQuant Quicktake platform by an analyst under the pseudonym ‘Darkfost,’ the Bitcoin Stock-to-Flow (S2F) reversion chart is now showing a major buy signal for Bitcoin.

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S2F Signal Prime Buy Opportunity

The S2F model is widely used to forecast Bitcoin’s price by measuring its scarcity. It indicates whether the market is leaning towards a buy or sell zone based on its supply rate.

Darkfost explained that the S2F reversion chart is now signalling a potential buying opportunity, with the SF ratio dipping below 1, which represents a green zone.

This zone suggests that Bitcoin may be undervalued compared to its historical trend, making it a potential time to accumulate BTC.

The analyst elaborated that the last time Bitcoin entered this buy zone was in June and September of 2023, followed by notable price recoveries.

Investors who had taken positions during these periods saw favorable returns as Bitcoin’s price rallied in the following months.

Notably, the S2F model’s predictive nature has often been a major tool for traders looking to capitalize on long-term Bitcoin trends. Asides its movement below 1, when the SF ratio climbs above 1, it signals a red zone, or profit-taking opportunity.

Bitcoin Price Action And Key Technical Levels

In addition to the S2F signal, Bitcoin’s price action in the past few days has also resulted from recent macroeconomic events, particularly the US Federal Reserve’s interest rate cut.

Following the rate reduction by 50 basis points on Wednesday, Bitcoin surged past $64,000 in the early hours of today, marking a significant rally given the asset has been in a bearish and accumulation phase prior.

However, as of now, the cryptocurrency has retraced slightly from its 24-hour high above $64,000 and is trading at $63,036, down by a mere 0.1% over the past day.

Meanwhile, despite the S2F reversion chart pointing to a potential buying opportunity, another crypto analyst, Ali, has raised concerns about Bitcoin’s near-term future.

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In a recent post on X, Ali highlighted Bitcoin’s current position relative to its 200-day Simple Moving Average (SMA), a critical indicator for determining the strength of a market trend. Bitcoin is currently testing this level, which historically has been an essential factor in confirming a bull run.

Ali noted that previous failures to reclaim the 200-day SMA, as seen in 2020, 2018, and 2014, led to significant price corrections. If Bitcoin fails to hold above this level in the coming days, it could signal a broader market downturn.

However, if it maintains support, Bitcoin could continue its upward trajectory, setting the stage for further gains.

Featured image created with DALL-E, Chart from TradingView