Over the bulk of the last 48 hours, Bitcoin, the world’s biggest cryptocurrency, has traded only below the $60,000 price mark, which is not far from the crypto’s all-time high. Normally, such consistent restructuring will be positive news, right? Yeah, really. However, everything must be placed in perspective and articulated in relative terms.
If you look at the cryptos below BTC, you’ll see that ETH and XRP are on the rise. Contrary to common opinion, the altcoin sector does not imitate Bitcoin, with two of the sector’s most influential alts defying the general price trend and reporting spikes on their own.
What exactly does this entail? Is it finally alt season? Perhaps. Maybe not. What is obvious is that all of these cryptocurrencies have grown in value as a consequence of ecosystem-centric innovations. The aim of this essay is to address the question, “Will anybody be worried about Bitcoin’s recent “stagnant” price movement?”
Yes, it is stagnant. At least, it is what many people are pointing to as a consolidatory step on the charts these days. These fears are, to some degree, warranted. After all, Bitcoin is the crypto-standard market’s bearer, and its success is vital to the overall market. However, considering BTC’s reluctance to maintain a violation of the psychological $60k mark, it appears that there isn’t anything to be worried about.
Remember this: according to Santiment, Bitcoin isn’t even in “mega overvalued territory,” with its 30d and 365d MVRVs just off their respective local peaks. In reality, these metrics show that there is still a lot of space for expansion, with a lot of future price upside on the way. Historically, price drops have followed local tops in the same.
Since we are still far from these peaks, BTC can be predicted to rise more, pending recent stabilisation, before correcting once more.
However, it would be difficult to determine if the aforementioned hike will be sufficient to break its ATH.
Santiment’s study also analysed the cryptocurrency’s 3-year and 5-year Latent Circulation, noticing that a large amount of very old coins were recently transferred across addresses. According to the paper, “this is a positive indication, delivery is continuing.”
Furthermore, other indicators such as Mean Coin Age seemed to indicate that the network-wide accumulation pattern is still going strong, considering the fact that there was some distribution in March.
Finally, understanding the dynamics of whale activity is critical for predicting what to expect in the future. This is particularly true considering that whales have not only dictated market changes in the past, but whale opinion is a strong indicator of where BTC will end up in the short term.
The number of daily whale transactions worth at least $1 million has increased by more than 740 percent in the last year, with the daily average increasing from 229 on 1 April 2020 to 1,930 on 1 April 2021.
In reality, amid brief hiccups and the fact that BTC hasn’t reciprocated or expressed the bullish sentiment of alts like ETH and XRP, its whale investors are declining to panic, with the brief decline in supply looking to level off at the time of writing.
That being said, it wouldn’t be a typical crypto-market if there weren’t a few red flags raising their heads. Although the above indicators point to positive times ahead for BTC, a few others seem to be on the conservative side.
Consider the financing rate for Bitcoin. A few days ago, it was estimated as +0.10 percent, very similar to the 0.12 percent levels seen a few weeks ago. The latter occurred in conjunction with the cryptocurrency’s local peak in March, which was accompanied by a major price decline.
This means that there isn’t much room for the Funding Rate to increase, with higher amounts just raising the risk of a short-term top and a resulting reversal.
There’s still the question of feeling. One thing is whale sentiment, but what about supermarket sentiment? Bitcoin’s weighted social opinion is reportedly close to a one-year peak. It is worth noting, though, that in the past, related discoveries have fuelled the trend of Bitcoin in the opposite direction.
🤔 #Bitcoin is on the cusp of crossing a $60,000 market value once again. And whether it does so or not in the next few days, #cryptotwitter is showing some major skepticism at this range. Historically, this level of doubt only propel $BTC further upward. https://t.co/J04Y8Et3n1 pic.twitter.com/sr4J9lj5FI
— Santiment (@santimentfeed) April 2, 2021
As a result, the only forecast for Bitcoin’s short-term prospects is confusion. If a longer period of consolidation is possible, market activity on the charts in any direction cannot be ruled out.
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