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The most important question on any investor’s mind in the Bitcoin market is, “When should I invest?” And it’s a reasonable question, especially because profit is the only motivator for an investment.
Well, it appears that the opportunity has resurfaced, as Bitcoin is currently at its best profitability level in quite some time.
Bitcoin is profitable
Based on the market’s robust surge over the last six weeks and the hard-hitting drop that followed, there is some uncertainty about whether the market is overheating or not.
A quickly increasing market that becomes unsustainable is referred to as an overheated market. However, based on the current state of the Bitcoin market, this does not appear to be the case. In reality, this is the perfect time to invest because the buying opportunity is quite beneficial.
Historically, the 200-day moving average (DMA) has been regarded as a reliable indication of buying and selling. When BTC’s price rises above it, it usually signals the start of a major upward trend. Movement in the opposite direction, on the other hand, is frequently an indication of a collapse.
Bitcoin’s price movement is currently in line with the 200 DMA — a clear indication that the market is not overheated.
In fact, another buy signal comes from the Mayer multiple. The indicator’s low values, at press time, seemed to suggest that Bitcoin is cheap relative to long-term trends. By implication, this translates to the present being a good time to buy.
At the time of writing, the aforementioned metric’s presence under 1 was a good enough signal.
However, in order to understand the state of the market for investment the overall value of the market must be checked if it’s in a state of profit or loss.
How is the market doing?
To assess profitability, we can employ the MVRV ratio, whose previous high values following halvings highlight signals of a bull market. As a result, the market indicators did not appear to be very suggestive of a bull run.
Nonetheless, given the press time MVRV of 2.2, it may be the beginning of one. Profitable gains can be predicted within a month if the value ranges from 2.0 to 5.0. This is an excellent place to invest, and you can expect to see a return within a month.
Anything higher than 5.0, on the other hand, is bad because it signals that repairs will be completed within a month. The market, on the other hand, is far from that. In reality, the MVRV hasn’t been close to 5 in more than 7 years.
Finally, understanding market sentiment is equally important too. This way, one can gauge where the market is really heading.
At press time, the Fear and Greed index was at its lowest in 50 days at 30.0 (fear). Price consolidation or recovery could push it back into the neutral zone. This will again be a good sign for investors looking to find profits.
All in all, the market is in a healthy state, with the aforementioned indicators flashing buy signals since profitability is coming up soon.