{"id":7028,"date":"2022-09-10T03:28:35","date_gmt":"2022-09-10T03:28:35","guid":{"rendered":"http:\/\/cryptoheretostay.com\/?p=7028"},"modified":"2022-09-10T03:28:35","modified_gmt":"2022-09-10T03:28:35","slug":"3-reasons-why-bitcoin-traders-should-be-bullish-on-btc","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=7028","title":{"rendered":"3 reasons why Bitcoin traders should be bullish on BTC"},"content":{"rendered":"<script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script>\n<p>Bitcoin (BTC) has been in a rut, and BTC\u2019s price is likely to stay in its current downtrend. But like I mentioned last week, when nobody is talking about Bitcoin, that\u2019s usually the best time to be buying Bitcoin.\u00a0<\/p>\n<p>In the last week, the price took another tumble, dropping below $19,000 on Sept. 6 and currently, BTC bulls are struggling to flip $19,000\u2013$20,000 back to support. Just this week, Federal Reserve Chairman Jerome Powell reiterated the Fed\u2019s dedication to doing literally whatever it takes to combat inflation \u201cuntil the job is done,\u201d and market analysts have increased their interest rate hike predictions from 0.50 basis points to 0.75. <\/p>\n<p>Basically, interest rate hikes and quantitative tightening are meant to crush consumer demand, which in turn, eventually leads to a decrease in the cost of goods and services, but we\u2019re not there yet. Additional rate hikes plus QT are likely to push equities markets lower and given their high correlation to Bitcoin price, a\u00a0further downside for BTC is the most likely outcome. <\/p>\n<p>So, yeah, there\u2019s not a strong investment thesis for Bitcoin right now from the perspective of price action and short-term gains. But what about those who have a longer investment horizon? <\/p>\n<p>Let\u2019s quickly review 3 charts that suggest investors should be buying Bitcoin. <\/p>\n<h2>Bitcoin investor tool: 2-year MA multiplier<\/h2>\n<p>Bitcoin\u2019s price is currently 72% down from its all-time high at $69,000. In the previous bear markets, BTC\u2019s price saw a 55% correction (July 21), a 71% drop by March 2020 and an 84% correction in December 2018. While brutal to endure, the current 72% correction is not outside of the norm when compared to previous drawdowns from all-time highs. <\/p>\n<p><em>Bitcoin 2-year moving average multiplier. Source: LookIntoBitcoin<\/em><\/p>\n<p>Comparing this drawdown data against the 2-year MA multiplier, one will notice that the price dropped below the 2-year moving average, carved out a trough and then consolidated for multiple months before resuming the 12-year-long uptrend. <\/p>\n<p>These areas are the \u201cshaded\u201d zones below the green 2-year moving average. Zooming in on the right side of the chart, we can see that price is again below the 2-year moving average, and while there is no sign of a \u201ctrough\u201d being dug, if historicals are to be relied upon, the price is currently in what could be described as a consolidation zone. <\/p>\n<h2>The golden ratio multiplier<\/h2>\n<p>Another interesting moving average and Fibonacci sequence-based indicator that suggests Bitcoin\u2019s price is undervalued is the golden ratio multiplier. <\/p>\n<p>According to LookIntoBitcoin creator Philip Swift:<\/p>\n<p>\u201cThe chart explores Bitcoin\u2019s adoption curve and market cycles to understand how price may behave on medium to long term time frames. To do this, it uses multiples of the 350 day moving average (350DMA) of Bitcoin\u2019s price to identify areas of potential resistance to price movements.\u201d <\/p>\n<p>Swift further explained that \u201cspecific multiplications of the 350DMA have been very effective over time at picking out intracycle highs for Bitcoin price and also the major market cycle highs.\u201d Essentially, the indicator is: <\/p>\n<p>\u201cAn effective tool because it is able to demonstrate when the market is likely overstretched within the context of Bitcoin\u2019s adoption curve growth and market cycles.\u201d<em>Bitcoin golden ratio multiplier. Source: LookIntoBitcoin<\/em><\/p>\n<p>Currently, BTC\u2019s price is below the 350DMA and similar to the 2-year MA multiplier. Dollar-cost-averaging into extreme lows has proven to be a wise method for building a Bitcoin position. <\/p>\n<p><em>BTC\/USDT 1 week chart. Source: TradingView<\/em><\/p>\n<p>Taking a look at Bitcoin\u2019s one-week relative strength index (RSI) also shows that the asset is nearly oversold. When comparing the weekly RSI to BTC\u2019s candlestick chart, it\u2019s clear that accumulation during oversold periods is also a profitable tactic. <\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>A bullish Bitcoin trend reversal is a far-fetched idea, but this metric is screaming \u2018buy\u2019<\/em><\/strong><\/p>\n<h2>Bitcoin\u2019s MVRV Z-score<\/h2>\n<p>An on-chain indicator called the MVRV recently hit its lowest score since 2015. The metric is essentially a ratio of BTC\u2019s market capitalization against its realized capitalization, or in simpler terms, the amount people paid for BTC compared to the asset\u2019s value now.<\/p>\n<p>According to Jarvis Labs analyst \u201cJJ,\u201d Bitcoin\u2019s MVRV (market capitalization versus realized capitalization) indicator is printing a reading that is extremely low. The analyst elaborated: <\/p>\n<p><em>Bitcoin price versus MVRV difference. Source: Jarvis Labs<\/em><\/p>\n<p>The MVRV Z-score provides insight into when Bitcoin is undervalued and overvalued relative to its fair price. According to analytics firm Glassnode, \u201cwhen market value is significantly higher than realized value, it has historically indicated a market top (red zone), while the opposite has indicated market bottoms (green zone).\u201d <\/p>\n<p><em>Bitcoin MVRV Z-Score. Source: Glassnode<\/em><\/p>\n<p>Looking at the chart, compared against BTC\u2019s price, the current -0.16 MVRV score is in the same range as previous multi-year and cycle bottoms for Bitcoin\u2019s price. A pure interpretation of the data would suggest that Bitcoin is in the midst of a bottoming process and possibly entering the early stages of accumulation.<\/p>\n<p>Of course, its price could drop much further, and the bearish factors that are battering equities markets will likely also continue to impact crypto prices, so none of the indicators mentioned above should be relied on as the solitary rationale for investing. <\/p>\n<p>The crypto market is in bad shape, and that seems unlikely to change in the short term, but timing market bottoms is also impossible for most traders. So, what investors should look for is confluence among a variety of metrics and indicators that align with one\u2019s thesis. <\/p>\n<p>At the moment, most of Bitcoin\u2019s on-chain metrics and technical analysis indicators suggest sensible dollar-cost-averaging into a manageable position. The key is risk management. Don\u2019t invest more than you can afford to lose, and you won\u2019t have to worry about losing your shirt.<\/p>\n<p>This newsletter was written by Big Smokey, the author of The Humble Pontificator\u00a0Substack and resident newsletter author at Cointelegraph. Each Friday, Big Smokey will write market insights, trending how-tos, analyses and early-bird research on potential emerging trends within the crypto market.<\/p>\n<p class=\"post-content__disclaimer\">Disclaimer. Cointelegraph does not endorse any content of product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.\n<\/p>\n<p><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/cointelegraph.com\/news\/3-reasons-why-bitcoin-traders-should-be-bullish-on-btc\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin (BTC) has been in a rut, and BTC\u2019s price is likely to stay in its current downtrend. But like I mentioned last week, when nobody is talking about Bitcoin, that\u2019s usually the best time to be buying Bitcoin.\u00a0 In the last week, the price took another tumble, dropping below $19,000 on Sept. 6 and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7029,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[2],"tags":[],"class_list":["post-7028","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-news"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/7028","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7028"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/7028\/revisions"}],"predecessor-version":[{"id":7030,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/7028\/revisions\/7030"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/7029"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7028"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7028"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7028"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}