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Recently, #Bitcoin experienced a dip below $60K, sparking concerns among holders and speculation about the end of the bull market with predictions of a decline to $50K or lower. However, a closer look at the data suggests that $58.5K may have marked the bottom:
1) Bitcoin RSI Bottom
- Following the drop to $58.5K, Bitcoin's weekly RSI hit an 8-month low.
- Historically, such RSI levels preceded significant reversals, notably when Bitcoin was at $28,000.
2) MVRV Below 1
- The Market Value to Realized Value ratio (MVRV) fell below 1, typically indicating a bottom in bull markets.
- This signals nearing capitulation and suggests the market has found its bottom.
3) June Bottom History
- Over the past four years, Bitcoin has consistently bottomed out in June:
- 2020: $9,000
- 2021: $29,500
- 2022: $19,000
- 2023: ~$24,900
- The recent drop below $59K aligns with this historical trend.
4) OI Down, Funding Reset
- Bitcoin's Open Interest (OI) dropped by 20% post-crash, with funding rates turning negative.
- This indicates a purge of retail greed, fostering a healthier market environment.
- Such scenarios often precede short liquidations and potential price rebounds.
Regarding the current market dynamics:
Mt. Gox Distribution: Scheduled to start soon, it's anticipated to extend until Q4, with participants unlikely to dump BTC en masse during a bull market.
Market Absorption: Bitcoin is capable of absorbing significant selling pressure, minimizing the potential impact of these sales.
Outlook: Unless influenced by unforeseen events like war or black swan events, a drop to $50K appears improbable based on current market conditions.
In summary, despite recent volatility, indicators point to potential resilience in Bitcoin's price trajectory, suggesting $58.5K might have been a pivotal support level in the current market cycle.
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