According to crypto analyst Akash Girimath, Bitcoin (BTC) price has crossed a vital psychological level, marking the beginning of a new decline. The analyst states that this move also caused altcoins to take a brutal blow. According to the analyst, although the BTC narrative may seem complex and unstable, clearing certain levels will give him the necessary direction. Akash Girimath’s Bitcoin analysis in line with the developments in the crypto money market cryptocoin.com We have prepared for our readers.
Adoption and regulation in the cryptocurrency market
The analyst states that despite the Bitcoin price falling, the fundamental aspect of the crypto ecosystem remains neutral as adoption continues to reach new highs. Again on adoption, a recent Bank of America (BoA) survey reveals that one in four analysts believes the price of Bitcoin will reach $75,000 in 12 months. 20% of respondents indicated that BTC will remain relatively stable between $50,000 and $75,000, while the rest note that the leading crypto is correcting steeply to anywhere between $25,000 and $50,000. More generally, the survey also shows that 37% of respondents are “long tech,” followed by 21% with “long Bitcoin.” Overall, the adoption of Bitcoin as an inflation hedge or a speculative asset increased in 2021.
According to the analyst, while crypto uptake remains strong, the infrastructure bill pushed by crypto industry enthusiasts seems to have failed. Meanwhile, there have been debates and fights over the bill that would have required brokers to report any cryptocurrency transaction greater than $10,000. This area of contention stems from the bill’s definition of “brokers” as tax miners, validators, and wallet developers. To clarify this issue, Republican Darren Soto and ten US Democrat congressmen published an open letter expressing their concerns over the current bill’s negative impact on the cryptocurrency ecosystem and its participants.
“Bitcoin price slides into indecision“
The analyst states that the Bitcoin price has dropped by about 20% since its ATH of $69,000, shattering the psychological level of $60,000. According to the analyst, as BTC hovers around the $56,233 support level, uncertainty is increasing for short-term investors and traders. Akash Girimath highlights the following technical levels:
A daily close below $56,233 will show Bitcoin price going to $53,000, which would coincide with the 100-day Simple Moving Average (SMA) aka scenario-2. However, if BTC holds above $56,233, investors can expect a relief bounce to retest $59,000 or $60,000.
However, the analyst says that following this, further declines are foreseen as the leading crypto returns to the 50-day SMA from $53,000 and continues his analysis as follows:
Traders should pay close attention to the $53,000 support base, as a break from this level due to any unforeseen increase in selling pressure could trigger an 8.5% correction to the next demand level of $48,379.
GIOM for Bitcoin, 365 days of MVRV and LTH analysis
Supporting this short-term bullish outlook for Bitcoin price, IntoTheBlock’s Money In/Exit Global (GIOM) pattern shows the most relevant support zone stretching from $53,808 to $40,325. The analyst points to the possibility of this support area falling to $40,000, although it is highly unlikely.
The analyst states that the 365-day Market Value to Realized Value (MVRV) pattern shows that there is more to this correction. This on-chain metric is used to determine the average profit/loss of investors who bought BTC in the past year. The analyst states that so far, the 365-day MVRV has dropped from 47% to 20%, indicating that a large chunk of investors are profiting.
While this on-chain metric has seen a drop of more than 50%, there is still a lot of room before it resets. Therefore, market participants should expect another drop.
According to the analyst, both the scenarios and the on-chain metrics outlined above point to a bearish outlook, while turning the $60,000 level into a support barrier will mark the start of an uptrend. The analyst states that the total supply held by Glassnode’s long-term holders (LTH) chart gives confidence to the bullish argument and makes the following statement:
This on-chain metric shows that LTH has only drained 100,000 BTC, or 0.7% of its total supply of 13.5 million. This suggests that investors are not worried about the ongoing collapse.
The analyst states that the reason for their carefree stance can be seen in the chart below, which shows that only 3% of LTH is underwater, which contrasts with short-term investors with 8.3% of those who bought BTC since its ATH of $69,000 at a loss. . According to the analyst, the split shows that the current decline could be driven by weak hands.
Confirmation of the bullish outlook could come from Bitcoin price producing a daily close above the $63,500 and $65,571 zone, and clearing this critical level could trigger Bitcoin price directly to $77,908, coinciding with the 161.8% Fibonacci extension level.
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