Analyst: Bitcoin Market Oversold and Ready for Major Bounce
At the time of writing, Bitcoin prices had reclaimed the $33,000 level for the first time in over a week. The king of crypto has made 1.5% on the day, building on yesterday’s momentum following a week of selling pressure.
Major Bounce Coming?
Analyst ‘CRYPTO₿IRB’ [@crypto_birb] has observed that there has been a complete reset on trend and momentum.
Analyzing the net unrealized profit/loss (NUPL), a measure of the difference between unrealized profit and unrealized loss to determine whether the network as a whole is currently in a state of profit or loss, the analyst added:
“NUPL suggests it’s as oversold as in September 2019 or September 2020 when it was trading at 6-9k usd. We’re lucky if we get 23-24k but market is ready for major bounce and final leg up in November-December imo,”
Technically, BTC would first need to reclaim the 50-day moving average which is currently at $35,200. For further strengthening of an uptrend, the next target is the 200-day MA which is at $44,670 according to Tradingview. The daily time-framed death cross which signaled the longer-term downtrend occurred on June 15.
The Bitcoin Fear and Greed Index, which can be used as a bellwether for market sentiment, is currently still in fearful territory however, registering a 23, or ‘extreme fear’.
Bitcoin Still Fundamentally Solid
The fundamentals for Bitcoin markets are still pretty solid. Market mover Elon Musk made a big impact this week when he stated that his two companies, Tesla and SpaceX are holding Bitcoin. He added that they, in addition to himself, have no intentions to sell.
Naturally, there was a FOMO-driven pump in reaction to this and BTC has gained 10% since the revelations.
The China crackdown FUD also appears to be dissipating with the general consensus among industry experts being positive. The great miner migration has resulted in more mining being done using renewable energy. Even mainstream media is now reporting that Bitcoin mining is better for the environment than it was when China dominated the hash power.
The next few days or possibly weeks will determine the direction of the next big move as one always comes after such a long period of low volatility.