Bitcoin price plunged fatally to a crucial support level after news of Russia attacking Ukraine spread. This drop caused the crypto market to crumble, but the recovery seems to be going well. Crypto analyst Akash Girimath states that this may be due to a relief rally of BTC. Akash Girimath’s Bitcoin forecast and price analysis in his own words cryptocoin.com We have prepared for our readers.
Bitcoin price is waiting for a move signal
Bitcoin price has dropped about 23% in almost a week and slumped to $34,337. The weekly support level of $34,752 was a major reason why BTC failed to explore lower levels. Interestingly, this recovery pushed BTC to form a daily candlestick above the lower bound of the $36,398 and $38,895 demand zone. This decisive close blocked a drop to $30,000 or lower and gave the bulls something to hold on to.
Looking forward, traders can expect BTC to continue its recovery and run at $39,481 at the recently reversed resistance barrier and at $40,417 at the 50-day Simple Moving Average (SMA). The Momentum Reversal Indicator (MRI) has lit a yellow up arrow indicating that a continuation of an upside move will result in a buy signal in the form of a green “one” candlestick on the daily chart. This formation predicts that BTC will now likely witness one to four green candlesticks.
Therefore, market participants can expect Bitcoin price to run for the weekly resistance barrier at $42,748. This is a place where there is likely to be an upside limit. However, if price orders pile up, there is a good chance for BTC to extend the rally to the annual open at $46,198, which roughly coincides with the 100-day SMA.
What do on-chain metrics show for bitcoin prediction?
IntoTheBlock’s Global Money In/Out (GIOM) model shows that there are approximately 4.50 million addresses “At the Money” that purchased 2.54 million BTC at an average price of $41,190. This level coincides with the technically achieved target and adds a tailwind to the bullish thesis.
While the sudden crash on February 25 caught many investors off guard, BTC’s on-chain volume saw a massive spike to 46.38 billion BTC, well above the 200-day Moving Average (MA).
Similar dips in price have coincided with large increases in on-chain volume in the past, implying that investors can buy the dips, i.e. stack up. Therefore, despite the recent crash, the increase in on-chain volume indicates that the aid rally will continue, in line with the technical perspective.
Also, it is possible to imply a short-term bullish trend due to the recent drop in Bitcoin price’s estimated leverage from 0.218 to an all-time high of 0.192. This 12% downtrend indicates that the market is less volatile after the spike and now the bulls can take over.
The short-term bull thesis is gaining confidence as the 30-day Market Value to Realized Value (MVRV) model has risen from -6.8% to -2.8% over the past three days. This on-chain metric shows the average profit/loss of investors who bought BTC last month. Despite the recent drop, the 30-day MVRV is close to the zero line, implying that many traders can buy the dip and profit from it, and a short-term rally is on the horizon.
While the bullish outlook is reasonable, bitcoin price needs to stay above the immediate demand zone stretching from $36,398 to $38,895. A daily candlestick near $36,398 will invalidate the demand zone and predict a move down to the weekly support at $34,752.
If BTC fails to hold above this barrier, it will invalidate the bullish argument and hint at a possible collapse to $29,100. This move could also go below the aforementioned level to collect the sell-stop liquidity that stands below it.
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